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SCHOOL  AND  SOCIETY.  A  weekly  journal  cov- 
ering the  field  of  education  in  relation  to  the 
problems  of  American  democracy. 

SCIENCE.  A  weekly  journal  devoted  to  the  ad- 
vancement of  science. 

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magazine,  devoted  to  the  diffusion  of  science. 

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voted to  the  biological  sciences. 

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directory. 

SCIENCE  AND  EDUCATION.  A  series  of  volumes 
for  the  promotion  of  scientific  research  and  edu- 
cational progress. 

Volume  I.    The  Foundations  of  Science.    By 

H.  PoiNCARife.  Containing  the  authorized 
English  translation  by  George  Bruce  Halsted, 
of  "Science  and  Hypothesis,"  "The  Value  of 
Science,"  and  "Science  and  Method." 

Volume  II.  Medical  Research  and  Education. 

By  Richard  Mii,i^  Pearcb,  Wii,i,iam  H. 
Wei^ch,  C.  S.  Minot  and  other  authors. 

Volume    III.      University    Control.      By   J.*^ 
McKeEn  CaTTEI,!.  and  other  authors. 


THE  SCIENCE  PRESS 

NEV  YORK  AND  GARRISON,  N.  Y. 


CARNEGIE  PENSIONS 


BT 

J.  McKEEN  CATTELL 


TOOETHEB   WITH 

EXTRACTS  FROM  LETTERS  FROM  TWO 
HUNDRED  AND  FOURTEEN  COLLEGE  AND 
UNIVERSITY  PROFESSORS,  AN  ARTICLE 
ON  THE  HISTORY  OF  THE  CARNEGIE 
FOUNDATION  BY  JOSEPH  JASTROW,  AND 
THE  REPORTS  OF  THE  COMMITTEE  ON 
PENSIONS  AND  INSURANCE  OF  THE 
AMERICAN  ASSOCL^TION  OF  UNIVERSITY 
PROFESSORS 


THE  SCIENCE  PRESS 

NEW  YORK  AND  GARRISON,  N.  Y. 

1919 


^^-^ 


PRESS  OF 

▼HE  NEW  ERA  PRINTING  COMPAMV 

LANCASTER,  PA. 


PREFACE 

The  Carnegie  Foundation  has  made  lavish  dis- 
tribution of  its  literature ;  it  seems  desirable  that 
the  position  adverse  to  its  plans  for  the  control 
pf  academic  teachers  should  be  stated  in  acces- 
pible  form.  There  are  consequently  here  repro- 
duced several  articles  that  I  have  written  on  the 
subject,  including  extracts  from  214  letters  by- 
university  and  college  professors;  an  article  on 
the  history  of  the  foundation  by  Professor  Jas- 
trow,  and  the  reports  of  the  committee  on  pen- 
sions and  insurance  of  the  American  Association 
of  University  Professors.  Permission  has  been 
obtained  from  Professor  Jastrow  for  the  use  of 
his  article.  The  reports  of  the  committee  of  the 
American  Association  of  University  Professors 
were  printed  in  a  journal  that  I  edit,  but  the 
association  is  not  responsible  for  their  present 
republication.       ''..,:,'        •:> 

Dr.  Henry  S.  Pritetiett,  piesiderit  of  the  Car- 
negie Foundation  a'nd  of  itxe  ugw  C&rnQgie  Com- 
pany, opens  his  article  oh  *  *T^he  l^ension  Prob- 
lem and  its  Solution'*  in  the  December  (1918) 
issue  of  The  Atlantic  Monthly  with  the  definition 
of  ** Pension"  in  Dr.  Johnson's  Dictionary: 

An  allowance  made  to  any  one  without  equivalent.    In 
England,  it  is  generally  understood  to  mean  pay  given 
to  a  state  hireling  for  treason  to  his  country, 
iii 


iv  CABNEGIE 

He  characterizes  the  effects  on  the  professor  of 
the  foundation  that  he  has  administered  for 
thirteen  years  as  follows : 

Aside  from  the  economic  and  financial  weaknesses 
which  have  justt  been  alluded  to,  there  is  a  more  serious 
objection  to  the  free  pension  which  only  those  who  have 
administered  such  a  system  can  fully  understand.  This 
lies  in  the  fact  that,  to  get  something  for  nothing,  or 
to  seem  to  get  something  for  nothing,  has  always  proved 
demoralizing.  The  so-called  free  pension  is  perhaps  the 
most  prolific  breeder  of  human  selfishness  ever  set  up  in 
the  social  order. 

Dr.  Nicholas  Murray  Butler,  president  of  Co- 
lumbia University  and  a  member  of  the  execu- 
tive committee  of  the  Carnegie  Foundation,  in 
one  of  his  last  reports  quotes  the  sentiment: 
**  Academic  freedom  means  freedom  to  say  what 
you  think  without  thinking  what  you  say,*'  and 
he  writes  still  more  explicitly  in  the  Educational 
Review : 

Truly  the  academic  animal  is  a  queer  beast.  If  he  can 
not  have  something  at  which  to  growl  and  snarl,  he  will 
growl  and  sh^\  at  nothing  :a^  «1]P.   , 

These  ;'emarks  ,by  ftose  J^esponsible  for  the  ad- 
ministra'tio'n:''of--tTArn*eg]e..E>eijsip*ns  scarcely  ex- 
hibit an  attitude  proper  for  the  conduct  of  a 
foundation  established  to  "encourage,  uphold 
and  dignify  the  profession  of  the  teacher  and  the 
cause  of  higher  education.''  They  are  quoted  in 
,order  to  use  the  authority  of  office  as  a  shield  for 
the  character  of  the  counter-statements  made  by 


PENSIONS  V 

college  and  university  professors  in  some  of  the 
letters  here  printed. 

Criticism  is  always  ungracious ;  it  is  futile  un- 
less it  leads  to  construction.  Mr.  Carnegie  and 
Mr.  Rockefeller  have  had  the  best  of  intentions 
in  making  their  large  endowments ;  most  of  those 
who  conduct  these  foundations  and  most  of  the 
trustees  and  executive  officers  of  our  endowed 
universities  have  sincere  faith  in  the  methods 
that  they  use  and  in  the  objects  that  they  seek 
to  accomplish.  But  a  democracy  can  not  submit 
to  the  policy  that  the  common  people  should  do 
the  work  assigned  to  them  and  leave  it  to  the 
king  and  his  lords  to  care  for  them. 

As  is  shown  in  this  book,  the  teachers  directly 
concerned  hold  by  a  majority  of  fifty  to  one  that 
the  plans  of  the  Carnegie  Foundation  are  un- 
satisfactory. The  only  solution  is  to  change  the 
plans.  The  first  step  should  be  to  discard  those 
responsible  for  the  existing  situation;  then  the 
teachers  should  come  into  control  of  a  foundation 
established  for  their  benefit. 

J.  McK.  C. 

Gabbison-cn-Hudson,  N.  Y. 
,       Maj,  1919 


CONTENTS 

Page 

Life  Insurance  and  Annuities  for  Academic 
Teachers   5 

The  *' Policies"  of  the  Carnegie  Company.    28 

The  Verdict  of  American  University  Pro- 
fessors       59 

The  Carnegie  Foundation  for  the  Advance- 
ment of  Teaching 100 

The  Fifth  Annual  Eeport  of  the  President 
of  the  Carnegie  Foundation 128 

Ten  Years  of  the  Carnegie  Foundation.  By 
Joseph  Jastrow 135 

Report  of  the  Committee  of  the  American 
Association  of  University  Professors  on 
Pensions  and  Insurance 184 

Second  Report  of  the  Committee  on  Pensions 
and  Insurance  of  the  American  Associa- 
tion of  University  Professors 213 

Supplementary  Statement  concerning  the 
Plan  of  Compulsory  and  Contributory 
Annuities  proposed  by  the  Carnegie  Foun- 
dation. By  Arthur  O.  Lovejoy  and 
Harlan  I.  Stone 241 


VI 


LIFE  INSURANCE  AND  ANNUITIES  FOR 
ACADEMIC  TEACHERSi 

When  Mr.  Andrew  Carnegie  made  in  1905 
his  munificent  gift  of  ten  million  dollars  to  es- 
tablish the  Carnegie  Foundation  for  the  Ad- 
vancement of  Teaching,  he  wrote  to  the  trus- 
tees: **  Expert  calculation  shows  that  the  rev- 
enue will  be  ample'*  **to  provide  retiring  pen- 
sions for  the  teachers  of  universities,  colleges 
and  technical  schools  in  our  country,  Canada 
and  New  Foundland.'*  The  university  presi- 
dents who  formed  the  board  of  trustees  may 
have  calculated  that  the  fund  would  provide 
large  subsidies  for  their  institutions,  but  it  is 
difficult  to  guess  who  could  have  made  the  cal- 
culation that  the  income  from  ten  million  dollars 
would  permanently  provide  pensions  for  college 
and  university  teachers  throughout  North 
America. 

The  president  of  Columbia  University  in  his 
annual  report  for  1906  stated  that  the  cost  of 
the  Carnegie  retiring  allowance  to  the  professor, 
if  in  middle  life,  **  would  be  not  less  than  $1,200 
annually.*'  If  all  the  teachers  were  in  middle 
life,  the  total  annual  cost  of  the  system  for 
Columbia  alone  would  consequently  be  twice  the 
whole  income  of  the  foundation.  The  present 
writer  printed  in  1909  the  basis  for  the  calcula- 

1  Priirted  in  School  and  Society,  November  9,  1918. 
5 


tion  that  forty  years  hence  a  complete  pension 
system  for  academic  teachers  might  require  two 
hundred  times  the  income  of  the  foundation. 

The  inevitable  has  happened,  as  it  inevitably 
does.  The  foundation  was  compelled  to  limit 
the  institutions  included  in  its  list,  so  that,  for 
example,  at  present  only  four  pensions  are  paid 
in  the  state  of  Illinois.  It  was  compelled  to 
give  up  its  length  of  service  pensions,  even  for 
those  to  whom  they  had  been  promised ;  it  was 
compelled  two  years  ago  to  abandon  the  whole 
plan  of  free  pensions;  it  now  finds  that  its  re- 
sources will  not  pay  the  obligations  into  which  it 
has  already  entered. 

AH  sorts  of  irrelevant  explanations  have  been 
offered  by  the  president  of  the  foundation,  Dr. 
Pritchett,  and  by  the  trustees  for  these  various 
steps.  Institutions  were  not  worthy  to  be  in- 
cluded. Thus,  to  take  an  example,  which  at  the 
same  time  illustrates  the  pernicious  control  that 
the  foundation  has  sought  to  exercise  even  over 
state  universities,  the  University  of  Illinois  was 
informed,  at  the  time  when  the  funds  of  the 
foundation  were  exhausted,  that  pensions  could 
not  be  granted  to  the  professors  in  its  academic 
departments  at  Urtbana  unless  it  would  alter  the 
conduct  of  its  medical  school  at  Chicago.  In 
like  manner  the  governor  of  Ohio  was  informed 
that  the  universities  of  the  state  must  be  *  *  re- 
constructed' '  on  lines  laid  down  by  the  founda- 
tion if  the  professors  in  the  Ohio  State  Univer- 
sity were  to  hope  for  pensions. 


PENSIONS  7 

When  the  foundation  found  that  it  had  no 
money  to  pay  the  len^h  of  service  pensions, 
which  were  one  of  the  two  objects  specified  in 
its  charter,  it  did  not  mention  its  financial  in- 
ability, but  the  president  announced  that  it  had 
been  discovered  that  the  effect  of  the  length  of 
service  pensions  was  not  **good"  owing  to  **the 
opportunity  which  is  opened  to  bring  pressure 
to  bear  on  the  teacher,  or  by  the  tendency  of 
the  teacher  assured  of  a  retiring  allowance  to 
become  ultra-critical  toward  the  administra- 
tion.'* When  the  foundation  could  no  longer 
pay  the  old-age  pensions  it  had  promised,  it  was 
announced  that  it  is  bad  for  teachers  to  **have 
the  risk  of  dependence  lifted  from  them  by  free 
gift,*'  that  it  is  **even  an  embarrassing  use  of 
trust  funds."  But  now  finally,  when  it  can  no 
longer  be  concealed,  confession  of  insolvency  is 
made.* 

Whether  what  the  officers  of  the  foundation 
call  the  *  *  expectations ' '  of  the  professors,  namely, 
the  promises  of  the  foundation,  are  contracts  is 
a  question  that  the  courts  may  be  called  upon  to 
decide.  Professors  have  in  many  cases  moved 
from  an  independent  institution  to  a  Carnegie 

a  The  most  severe  arraignment  of  the  foundation  will 
be  found  in  the  annual  reports  of  the  president.  A  criti- 
cal review  has  been  published  bj  Professor  Joseph  Jas- 
trow  in  School  and  Society,  October  7,  1916.  The  pres- 
ent writer  has  discussed  the  conduct  of  the  foundation  in 
Science,  April  24,  1908,  April  2,  1909,  March  11,  1910, 
Decemiber  2,  1910,  March  3,  1911  and  April  15,  1916. 


8  CABNEGIE 

institution  in  view  of  the  promise  of  a  pension ; 
they  have  given  up  lucrative  business  or  profes- 
sional careers  owing  to  the  permanence  of  ten- 
ure and  the  pensions  that  have  been  guaranteed, 
and  the  like.  It  may  be  that  the  courts  will  de- 
cide that  the  promises  of  payment  for  these 
services  are  contracts,  in  which  case  the  cor- 
poration will  be  technically  bankrupt.  In  any 
case  it  is  morally  insolvent,  and  it  might  be  sup- 
posed that  it  would  place  its  affairs  in  the  hands 
of  a  receiver  selected  by  its  creditors  for  such 
adjustments  as  can  be  made  with  least  injury  to 
them. 

But  the  president  of  the  Carnegie  Founda- 
tion and  the  presidents  of  universities  who  are 
its  trustees  cling  to  their  power  to  control  our 
academic  institutions  and  their  teachers.  They 
ihave  grasped  **the  skirts  of  circumstance.*' 
No  longer  having  money  to  pay  for  their  over- 
lordship,  they  have  devised  a  plan  of  contribu- 
tory and  compulsory  annuities  which  will  com- 
pel institutions  and  teachers  to  pay  for  their 
own  subjection. 

Industrial  workers  understand  how  com- 
pletely pension  systems  place  them  at  the  mercy 
of  their  employers.  Thus  a  trade-union  paper 
remarks : 

Twenty  years  of  contimions,  faithful  service  are  de- 
manded by  most  pension-advertising  corporations  before 
the  worker  is  entitled  to  a  certain  monthly  or  weekly  al- 
lowance.    Twenty  years   during  which  time  the  slave 


PENSIONS  9 

must  always  be  humble,  never  grumble,  do  everything  de- 
manded, never  think  of  trying  to  better  his  conditions, 
be  always  satisfied,  and  never,  never  join  his  fellows  in 
an  organization  for  the  purpose  of  enforcing  demands 
he  individually  can  not  obtain.  And  this  is  the  kernel 
contained  in  the  sugar-coated  pension  pill. 

In  the  case  of  college  and  university  teachers 
a  pension  system  may  prove  particularly  per- 
nicious, for  it  can  be  used  to  control  not  only 
their  freedom  of  action,  but  also  their  freedom 
of  teaching  and  of  investigation.  President  But- 
ler's statement  is  quoted  above  to  the  effect  that 
the  cost  of  a  pension  may  be  $1,200  a  year  to 
the  professor.  This  considerable  sum  is  with- 
held from  his  salary,  to  be  repaid  ultimately  for 
good  behavior.  The  professor  who  does  not  see 
eye  to  eye  with  Wall  Street  and  Trinity  Church 
may  be  compelled  to  sacrifice  either  his  intel- 
lectual integrity  or  his  wife  and  children.  He  is 
under  heavy  bonds  to  keep  the  peace;  but  it  will 
be  the  peace  of  the  desert. 

The  control  which  a  pension  system  may  seek 
to  exercise  can  be  illustrated  by  an  example. 
When  in  1910  the  present  writer  enquired' 
whether  he  could  obtain  the  length  of  service 
pension  which  the  rules  of  the  Carnegie  Foun- 
dation had  provided,  the  president  in  his  reply 
described  the  inquisition  that  would  be  under- 
taken into  his  scientific  ability  and  said  in  con- 
clusion : 

•  The  correspondence  is  printed  in  Science,  December 
2,  1910. 


10  CABNEGIE 

I  ought  to  add  that  the  foundation  would  view  with 
grave  concern  the  possibility  of  your  withdrawal  from 
editorial  duties.  We  should  find  it  difficult  to  get  along 
without  the  aid  of  your  kindly  and  encouraging  editorial 
scrutiny. 

To  this  the  reply  was  made : 

Your  last  paragraph  is  presumably  only  legitimate 
irony;  but  it  is  open  to  the  unfortunate  interpretation 
that  beneficiaries  of  the  foundation  may  not  criticize 
its  conduct  or  the  educational  schemes  it  promotes. 

Professor  Josiah  Eoyce,  one  of  the  greatest 
and  noblest  of  our  teachers,  in  a  criticism*  of 
the  unjustifiable  interference  of  the  Carnegie 
Foundation  with  the  affairs  of  Middlebury  Col- 
lege, wrote  with  reference  to  this  incident: 

The  CSarnegie  Foundation  is  from  its  very  nature  not 
responsible  in  any  obvious  and  regular  way  to  existing 
academic  opinion.  It  carries  out  the  wishes  of  its 
founder  as  interpreted  by  a  board  of  trustees  whose 
powers  are,  comparatively  speaking,  autocratic.  This 
board  inevitably  represents  the  judgment  of  administra- 
tors rather  than  the  judgment  of  teachers.  Experience 
has  shown  that  the  foundation  is  not  very  sensitive  to  the 
opinion  of  teachers.  In  a  well-known  case,  when  an  emi- 
nent teacher  whom  we  all  value  expressed  a  plain  and 
not  unreasonable  opinion  of  some  of  its  acts,  the  reply 
of  the  Carnegie  Foundation,  through  its  president,  was 
a  sarcastic  intimation,  which  could  only  be  understood 
as  meaning  that  some  people  ought  to  mind  their  own 
business. 

It  is  possible  that  it  may  on  the  average  be  to 
the  financial  advantage  of  an  institution  to  re- 
,    *  School  and  Society,  January  30,  1915. 


PENSIONS  11 

tire  professors  at  the  age  of  sixty-lBve.  It  is 
doubtless  so  if  the  pension  is  paid  by  an  outside 
corporation  or  by  enforced  contributions  from 
the  professors.  But  it  is  not  an  advantage  to 
the  teacher  to  be  dismissed  from  his  life  work 
and  be  relieved  of  half  of  his  salary  at  a  time  of 
life  when  men  in  other  professions  and  in  busi- 
ness are  active  and  earning  larger  incomes  than 
ever  before.  When  in  recent  years  the  writer 
wanted  the  best  legal  advice  in  New  York  City 
he  consulted  Mr.  Choate;  when  he  wanted  the 
best  medical  advice  he  consulted  Dr.  Jacobi; 
when  he  wanted  the  best  possible  article  to  in- 
augurate School  and  Society  he  obtained  it  from 
President  Eliot.  None  of  these  men  lost  his  in- 
tellectual vigor  in  the  eighties.  Now  when  I 
want  the  best  actuarial  advice  in  New  York  City 
I  consult  an  actuary  seventy-four  years  of  age. 
My  two  great  teachers  in  psychology — Professor 
March,  of  Lafayette  College  and  Professor 
Wundt,  of  the  University  of  Leipzig — continued 
their  teaching  until  they  were  over  eighty. 

The  situation  of  the  professor  is  peculiar  be- 
cause the  continuation  of  his  work  after  the  age 
of  sixty-five  years  depends  on  the  favor  of  the 
president.  The  president  decides  each  year 
whether  the  professor  shall  be  kept  on,  judging 
his  competence  for  the  work,  and  being  influ- 
enced by  other  considerations,  such  as  the  means 
of  the  institution,  the  availability  of  a  successor, 
the  professor's  ** loyalty*'  to  him  personally,  and 


12  CABNEGIE 

the  like.  The  whole  theory  of  permanence  of 
tenure  on  which  the  low  salary  of  the  professor 
is  based  breaks  down  at  the  age  of  sixty-five. 
Any  one  familiar  with  the  conditions  at  a  uni- 
versity such  as  Columbia,  will  know  the  bitter- 
ness and  humiliation  which  result  from  drop- 
ping men  as  they  grow  older  on  the  ground  of 
alleged  incompetence.  The  professorship  should 
be  a  life  office,  as  it  is  in  Great  Britain,  in  France 
and  in  Germany.  The  older  teachers  should  be 
relieved  of  work  that  they  find  irksome  or  can 
not  do  to  advantage ;  and  teachers  should  be  en- 
titled to  a  pension  for  disability  at  any  age. 

Any  plan  for  the  retirement  of  older  or  dis- 
abled professors  should  be  left  to  the  institutions 
in  which  they  teach.  If  the  pension  is  paid  from 
outside  sources,  the  temptation  of  the  president 
to  retire  the  professor  prematurely  is  greatly 
enhanced.  Most  of  the  eastern  universities  had 
pension  systems,  which  were  contracts  with  their 
professors,  before  the  Carnegie  Foundation  in- 
tervened. That  corporation  should  have  used 
its  income,  or  preferably  its  capital,  to  establish 
disability  pension  systems  in  institutions  where 
they  did  not  exist,  and  to  strengthen  the  systems 
in  the  interest  of  the  institution  and  its  pro- 
fessors w'here  they  were  already  in  operation. 
Variation  in  different  institutions  would  allow 
opportunity  for  the  survival  of  the  fit;  and  the 
ablest  men  would  go  to  the  institution  offering 
the  plan  most  acceptable  to  them.    By  its  meth- 


1  PENSIONS  18 

ods  of  centralization  and  outside  control  the 
Camera  Foundation  has  done  its  share  to  de- 
moralize the  entire  university  situation. 

Instead  of  confessing  their  incompetence  and 
insolvency  and  leaving  pension  systems  to  the 
educational  institutions  where  they  belong,  the 
university  presidents  who  are  the  trustees  of  the 
Carnegie  Foundation  now  propose  to  maintain 
and  even  enlarge  their  control  of  academic 
teachers  by  establishing  a  contributory  and  com- 
pulsory system  of  annuities.  The  American  As- 
sociation of  University  Professors  appointed  a 
committee  of  twenty-four  with  Harlan  I.  Stone, 
dean  of  the  Columbia  Law  School,  as  chairman, 
to  report  on  the  situation.  This  committee  drew 
up  a  careful  report*  in  which  it  says : 

.  Thus  it  Beems  clear  that  the  Carnegie  Foundation  ia 
under  moral  obligations,  not  only  to  individuals,  but  to 
the  institutions  themselves,  not  to  deprive  teachers  in  the 
accepted  institutions  of  their  present  expectancy  of  a 
pension.  There  is  no  middle  ground  for  the  compromise 
of  moral  obligations.  We  are  therefore  of  the  opinion 
that  the  Carnegie  Foundation  should  not  assume  any 
new  functions  until  its  present  obligations  both  moral 
and  legal  are  examined  with  precision,  and  provision 
made  explicitly  for  meeting  those  obligations. 

The  committee  further  says  in  the  concluding 
paragraph  of  its  rex)ort : 

The  unfortunate  financial  history  of  the  foundation, 
the  suggested  change  in  its  fimdamental  purpose  under 
the  guise  of  a  change  of  rules  relating  to  its  administra- 

8  Printed  in  School  and  Society,  December  2,  1916. 
2 


14  CABNEGIE 

tion,  the  defects  and  omissions  in  the  proposed  Compre- 
hensive  Plan  of  Insurance  and  the  unconvincing  char- 
acter of  the  reasons  which  are  urged  for  the  change, 
have  resulted  in  a  loss  of  confidence  in  the  foundation 
on  the  part  of  American  university  teachers.  No  mjan 
enjoying  a  wide  acquaintance  with  members  of  the  pro- 
fession can  have  any  doubt  of  this  fact.  If  evidence  of 
it  were  needed,  it  may  be  found  in  the  reports  of  various 
comnuttees  of  university  faculties,  appointed  to  consider 
the  ComprehenMve  Plan  of  Insurance  and  Annuities, 
such  as,  for  example,  the  reports  of  Cornell,  Harvard, 
Princeton,  Stanford  Universities,  the  University  of  Wis- 
consin and  Johns  Hopkins  University.  Such  lack  of  con- 
fidence must  inevitably  impair  the  usefulness  of  the 
foundation,  and  make  it  difficult,  if  not  impossible,  to 
solve  satisfactorily  the  problems  which  are  pressing  for 
solution. 

This  report  compelled  the  Carnegie  Founda- 
tion to  submit  to  asking  the  cooperation  of  the 
American  Association  of  University  Professors. 
A  commission  was  appointed  containing  six  rep- 
resentatives of  the  Carnegie  Foundation,  two  of 
the  American  Association  of  University  Pro- 
fessors and  one  each  of  the  Association  of  Amer- 
ican Universities,  the  National  Association  of 
State  Universities  and  the  Association  of  Amer- 
ican Colleges.  This  commission  of  course  found 
that  the  foundation  was  insolvent.  For  the  pres- 
ent group  of  accepted  institutions  and  teachers, 
the  annual  cost  (if  retirement  is  at  sixty-five) 
would  ultimately  be  $2,226,422.  The  income 
from  the  endowment  of  the  foundation  in  1917 
was   $519,862.     The  commission  recommended 


PENSIONS  15 

that  the  foundation  should  first  meet  its  exist- 
ing obligations — ^which  it  assumed  was  possible 
through  the  Carnegie  Corporation,  to  which  Mr. 
Carnegie  has  given  $125,000,000  to  underwrite 
the  foundations  that  bear  his  name.  It  then 
outlined  a  plan  for  contributory  pensions  to 
take  the  place  of  the  free  pensions  of  the  in- 
solvent foundation. 

The  executive  committee  of  the  Carnegie 
Foundation,  headed  by  President  Nicholas  Mur- 
ray Butler,  has  now  issued  a  report.  The  Car- 
negie Corporation  has  consented  to  contribute 
$11,000,000  which  will  enable  the  foundation  to 
meet  about  two  thirds  of  the  engagements  that 
it  has  already  contracted.  The  pensions  pro- 
vided are  to  be  reduced  in  size,  so  that  ulti- 
mately the  professor  retiring  at  the  age  of  sixty- 
five  will  receive  two  thirds  of  the  pension  prom- 
^ed,  and  less  if  he  has  no  living  wife.  It  re- 
mains to  be  seen  whether  the  American  Asso- 
ciation of  University  Professors  will  accejrt  this 
compromise  of  the  foundation  with  its  creditors. 

At  the  same  time  there  has  been  made  public 
the  proposed  charter  (since  granted)  of  the 
Teachers'  Insurance  and  Annuity  Association  of 
America,  the  incorporators  being  headed  with 
the  names  of  Elihu  Root  and  Nicholas  Murray 
Butler.  The  Carnegie  Corporation  provides  a 
million  dollars  for  capital  and  surplus  and  owns 
the  stock.  It  is  not  a  mutual  company,  but  its 
business  is  to  be  conducted  without  profit  to  it 


16  CABNEGIE 

or  its  stockholders,  and  it  is  said  that  arrange- 
ments may  later  be  made  by  which  the  policy 
holders  may  participate  in  the  management. 

The  plans  for  insurance  and  annuities  of  this 
association  are  not  yet  announced,  but  they  are 
foreshadowed  by  statements  of  Dr.  Pritchett, 
who  is  on  the  interlocking  directorates  of  the 
three  corporations,  and  by  the  commission  of 
which  also  he  was  a  member.  It  is  proposed  that 
the  association  shall  write  term  insurance,  ex- 
piring at  sixty-five  or  later,  the  purchase  of 
which  is  to  be  optional  with  the  teacher.  The 
premiums  will  be  computed  on  the  basis  of  the 
American  Experience  Table  and  3^  per  cent, 
interest.  It  is  then  proposed  that  *Hhe  annu- 
itant, or  his  college,  or  the  two  together,  will  con- 
tract to  pay  to  the  association  *  level*  premiums 
of  a  certain  amount  each  year  until  the  annu- 
itant reaches  his  sixty-fifth  year.''  Provision  is 
made  for  repayment  in  case  of  death  or  retire- 
ment. The  accumulation  will  be  invested  by 
the  association  and  will  be  converted  into  an 
annuity  on  the  basis  of  McClintock's  Table  and 
4  per  cent,  interest.  The  purchase  of  the  an- 
nuity is  to  be  compulsory  for  all  teachers  in  in- 
stitutions that  join  in  the  plan.® 

6  Most  of  the  state  universities  have  been  eager  to  ob- 
tain the  free  pensions  of  the  Carnegie  Foundation,  but  it 
is  not  likely  that  they  will  contribute  to  the  purchase  of 
annuities  for  their  professors  from  a  private  corpora- 
tion.    A  charming  memorandimi  was  submitted  by  the 


PENSIONS  17 

It  is  announced  that  the  association  will  not 
contract  for  an  annuity  of  any  stated  amount, 
nor  to  compound  the  payments  at  any  stated 
rate  of  interest,  but  that  the  foundation  will 
guarantee  4^  per  cent.  Dr.  Pritchett  realizes 
the  difference,  for  he  says:  ** Whether  the  indi- 
vidual participates  in  insurance  or  in  a  deferred 
annuity,  he  can  be  secure  only  when  the  relation 
is  contractual.*'  This  is  certainly  understood 
by  teachers  to  whom  the  Carnegie  Foundation 
has  not  paid  the  length  of  service  pensions  which 
it  had  promised  and  by  those  to  whom  it  will  not 
pay  the  old-age  pensions  which  it  had  promised. 
There  are,  however,  men  of  business  who  like  to 
believe  that  their  word  is  as  good  as  their  bond. 

Unlike  the  Carnegie  Foundation  the  new 
scheme  has  had  expert  actuarial  advice.  An  as- 
sociation writing  life  insurance  for  teachers  on 
the  basis  of  the  American  Experience  Table  and 

commiflsion  to  the  Carnegie  Foundation  to  the  effect  that 
*'in  8tate-«upported  institutions  of  higher  education 
whose  standards  are  in  conformity  with  the  rules  of  the 
foundation,  such  institutions  may  be  admitted  to  the 
benefit  of  the  new  system  *'  when  the  governing  board 
approves  of  the  principle  of  institutional  contribution, 
'*  meanwhile  reconmiending  and  permitting  the  eligible 
faculty  as  a  group,  to  carry  the  entire  burden  of  neces- 
sary contribution  for  themselves  and  on  behalf  of  the 
institution. ' '  It  was  later  also  voted  that  the  founda- 
tion should  consider  extending  the  same  privilege  to  en- 
dowed institutions.  An  imusual  ''benefit''  is  certainly 
extended  to  professors  in  institutions  ''whose  standards 
are  in  conformity  with  the  rules  of  the  foundation. ' ' 


18  CABNEGIE 

3 J  per  cent,  interest  will  earn  large  profits  if 
properly  managed.  Teachers  have  an  expecta- 
tion of  life  much  above  that  of  the  American  Ex- 
perience Table,  and  the  present  rate  of  interest, 
which  is  likely  to  continue  or  increase,  is  much 
above  3J  per  cent.  The  association  will  not  con- 
tract to  give  the  insured  the  benefit  of  profits 
accruing  on  account  of  a  higher  rate  of  interest, 
but  expects  to  provide  for  a  distribution  of 
bonuses. 

The  new  association  obviously  does  not  offer 
academic  teachers  anything  that  they  can  not 
obtain  from  the  standard  companies.  It  does 
not  provide  for  disability  allowances  which  are 
what  is  most  needed.  The  association,  however, 
has  what  amounts  to  an  endowment  of  one  mil- 
lion dollars,  and  is  dealing  with  preferred  lives. 
It  may  be  able  to  divide  profits  larger  than  the 
dividends  of  the  mutual  companies.  This,  how- 
ever, is  not  certain.  There  are  at  present  6,593 
teachers  in  the  Carnegie  institutions,  seventy 
of  our  more  than  seven  hundred  colleges  and 
universities.  If  the  association  writes  10,000 
policies,  it  will  have  an  annual  subsidy  of  $5 
for  each;  if  20,000,  it  will  have  $2.50.  It  may 
be  that  this  amount  will  not  cover  the  additional 
overhead  and  agency  expenses  of  a  comparatively 
small  company,  operating  in  all  the  states  and 
in  Canada.  The  standard  companies  must  main- 
tain agencies,  legal  departments  and  medical 
service  everywhere,  and  the  cost  divided  among 


PENSIONS  19 

a  million  policy  holders  is  obviously  much  less 
than  it  would  be  if  the  cost  of  a  similar  service 
is  divided  among  10,000  policy  holders. 

The  question,  however,  is  not  financial  only, 
or  chiefly.  The  fundamental  problem  is  whether 
it  is  for  the  ultimate  welfare  of  academic  teach- 
ers to  be  compelled  to  purchase  annuities  in  a 
company  controlled  by  university  presidents. 
The  interest  of  the  university  and  of  its  pro- 
fessors should  be  identical,  but  this  is  impossible 
until  the  professors  have  some  control  in  the 
university.  At  present  almost  every  professor 
in  every  university  wants  his  salary  increased; 
the  president  sits  on  the  safety  valve  as  long  as 
he  dares.  The  professor  wants  freedom;  the 
president  has  his  eye  on  students,  alumni  and 
benefactors,  and  wants  a  personal  machine  to 
run  the  institution.  Compulsory  retirement  on 
an  annuity  at  the  age  of  sixty-five,  or  at  the 
option  of  the  president,  especially  when  the  an- 
nuity has  been  purchased  by  the  professor,  may 
work  extraordinary  hardship  to  him,  and  may 
be  used  to  keep  him  in  a  condition  of  servitude. 

Academic  teachers  are  face  to  face  with  a  dif- 
ficult situation  and  one  vital  to  them.  It  is  for- 
tunate that  they  have  a  well-organized  a;nd 
powerful  body  in  the  American  Association  of 
University  Professors.  This  association  was 
represented  on  the  commission  which  drew  up 
the  plans  for  the  Teachers*  Insurance  and  An- 
nuity Association   by   two   members,   selected, 


20  CABNEGIE 

however,  for  their  actuarial  knowledge,  rather 
than  for  their  interest  in  academic  freedom. 
They  were  subordinated  to  four  associations  rep- 
resenting college  and  university  presidents.  The 
Carnegie  Foundation  has  not  followed  the  recom- 
mendations of  the  commission  even  though  it 
was  dominated  by  Dr.  Pritchett  and  the  other 
trustees  of  the  foundation.  It  has  not  provided 
for  the  payment  of  its  existing  obligations;  it 
will  not  establish  disability  pensions;  it  does 
not  permit  the  American  Association  of  Uni- 
versity Professors  to  share  in  the  management. 

The  problem  is  now  under  consideration  by 
the  representative  committee  of  the  American 
Association  of  University  Professors.  This 
committee  and  the  teachers  of  the  country  may 
accept  the  plan  and  seek  to  guide  it  in  a  direc- 
tion that  will  benefit  them  and  avoid  the  sub- 
jection of  the  teacher  to  the  administration. 
Probably  this  can  only  be  accomplished  by  abol- 
ishing the  compulsory  feature  and  permitting 
the  teacher  to  purchase  his  insurance,  and  an 
annuity,  if  he  wants  one,  in  the  new  association 
or  wherever  he  can  do  so  to  the  best  advantage 
and  with  the  least  danger  to  his  freedom  of  ac- 
tion, of  teaching  and  of  research. 

But  other  plans  should  be  considered  now  if 
ever,  and  there  are  at  least  two  alternatives. 
The  teachers  might  form  a  mutual  company  of 
their  own  or  they  might  unite  to  secure  fa- 
vorable methods  and  terms  from  one  of  the 
standard  companies. 


PENSIONS  21 

A  mutual  company  limited  to  teachers  and 
scientific  men  has  always  appealed  to  the  present 
writer  and  he  had  under  constant  consideration 
efforts  to  organize  such  a  company  before  the  ill- 
starred  Carnegie  Foundation  intervened  to  dis- 
rupt the  existing  pension  policies  of  our  univer- 
sities and  the  insurance  policies  of  individuals. 
At  that  time  the  writer  carried  life  insurance  of 
$20,000.  He  estimates  that  a  company  would 
make  a  clear  excess  profit  of  $5,000  on  a  $20,000 
straight  life  policy,  if  the  expectation  of  life  of 
a  university  professor  of  good  heredity  and 
habits  is  five  years  greater  than  the  average. 

The  company  would  on  the  average  receive 
the  premium  payments  for  five  years  longer, 
say,  $1,500,  and  if  the  insured  lived  five  years 
beyond  the  average  age  it  would  have  the  in- 
terest of  $20,000  for  five  years,  say  at  compound 
interest  $5,000.  These  excess  profits  of  $6,500 
would  on  the  average  be  reduced  somewhat,  for, 
while  the  excess  profits  on  the  policies  of  those 
who  died  earlier  would  be  in  proportion,  the  ab- 
solute amount  would  be  less.  One  may,  how- 
ever, guess  that  a  company  which  insures  for 
$20,000  a  life  with  an  expectation  five  years  be- 
yond the  average  makes  an  excess  profit  in  the 
neighborhood  of  $5,000.  A  stock  company 
would  make  profits  of  fifty  million  dollars  by 
insuring  10,000  such  lives. 

It  is  almost  certain  that  college  and  university 
teachers  have  an  expectation  of  life  beyond  the 


22  CABNEGIE 

average,  but  we  do  not  know  how  large  it  is.  It 
could  readily  be  determined  by  a  competent  act- 
uary, and  somewhat  comparable  data  are  avail- 
able in  the  experience  of  organizations  such  as 
the  Presbyterian  Ministers  Fund.  For  its  pol- 
icy holders  the  actual  mortality  has  in  recent 
years  been  less  than  half  the  expected  mortality. 
According  to  the  data  in  the  writer's  ** Statis- 
tical Study  of  American  Men  of  Science'*  the 
d^eath  rate  of  those  under  fifty  from  1904  to 
1910  was  about  three  per  thousand  as  compared 
with  an  expected  mortality  of  about  ten. 

For  an  insurance  company  a  capital  of  $100,- 
000  and  a  surplus  of  $50,000  are  required  by  the 
New  York  state  laws.  If  one  hundred  and  fifty 
college  teachers  and  scientific  men  would  form 
a  company,  each  taking  a  share  at  $1,000,  no  one 
being  permitted  to  hold  more  than  one  share  or 
to  transfer  his  share  to  any  one  but  a  teacher, 
and  if  such  a  company  wrote  insurance  for 
teachers  on  the  basis  of  the  American  Expe- 
rience Table  and  3J  per  cent,  interest,  it  would 
with  proper  management  be  financially  success- 
ful. It  might  also  arrange  life  insurance  and 
annuities  more  favorable  to  the  independence  of 
the  teacher  than  can  be  expected  from  an  asso- 
ciation controlled  by  university  presidents  and 
having  xdterior  motives. 

For  example,  Dr  Pritchett  thinks  that  life  in- 
surance is  of  no  use  after  the  age  of  sixty-five; 
but  some  of  us  even  at  that  age  may  be  con- 


PENSIONS  23 

cerned  about  our  children  and  our  grandchil- 
dren. We  may  also  not  care  to  have  our  sav- 
ings converted  by  compulsion  into  an  annuity 
which  lapses  at  death  and  leaves  nothing  for 
our  heirs.  As  a  psychologist  the  writer  is  con- 
cerned with  types,  and  two  of  those  which  he 
has  proposed  are  two  opposite  kinds  of  men, 
those  who  take  out  life  insurance  and  those  who 
buy  annuities.  Ten  years  ago  he  wrote  to  Dr. 
Pritchett:^ 

It  appears  to  me  that  most  healthy-minded  men  are 
more  concerned  with  provision  for  their  families  in  case 
of  disablement  or  death  than  with  anxiety  as  to  their 
own  old  age.  I  sympathize  with  those  who  take  out  life 
insurance,  not  with  those  who  buy  annuities,  and  it  gives 
me  no  satisfaction  to  be  put  by  force  of  circumstance 
into  the  latter  class.  I  should  like  to  exchange  mj 
annuity  for  life  insurance  of  equal  value,  and  I  believe 
that  this  would  be  the  nearly  unanimous  preference  of 
my  colleagues. 

The  Carnegie  Foundation  adds  substantially  to  the  in- 
comes of  accepted  universities  and  colleges,  but  it  does 
not  greatly  assist  the  individual  professor.  The  pro- 
vision for  retirement  for  age  does  not  help  at  all  in  in- 
stitutions that  already  had  a  pension  system ;  in  other  ac- 
cepted institutions  the  salaries  will  be  adjusted  with  ref- 
erence to  the  pension,  and  the  only  individuals  who 
benefit  are  some  of  the  older  men  in  institutions  without 
a  pension  system  for  whom  the  benefit  is  retroactive. 
Apart  from  this  group,  the  benefit  to  the  individual — ^and 
only  until  readjustment  of  salaries  takes  place — ^is  coat- 
fined  to  the  length  of  service  provision,  the  wisdom  of 

7  The  correspondence  is  printed  in  the  issue  of  Science 
for  April  24,  1908. 


24  CABNEGIE 

wihidh  is  doubtful,  and  the  widow's  pension,  wMcli  only 
applies  at  the  age  when  it  is  least  needed,  and  if  admin- 
etered  aa  a  charity  would  in  the  long  run  be,  as  you  say, 
*'sure  to  harm  rather  than  to  help  the  teacher  and  the 
cause  of  education.'* 

.  If  the  professor  must  be  the  Versuchstier  of  paternal- 
ism, is  not  the  German  system — ^by  which  he  receives  his 
salary  for  life,  being  relieved  from  service  if  disabled 
by  illness  or  old  age,  and  his  widow  and  each  of  his 
minor  children  receive  a  pension — ^the  best  plan  both  for 
the  professor  and  for  the  university.  And,  if  so,  could 
not  the  Carnegie  Foundation  bring  about  this  system  by 
offering  endowments  to  those  institutions  that  would 
adopt  it? 

Probably  the  form  of  insurance  making  the 
strongest  appeal  to  married  teachers  is  the  en- 
dowment policy.  In  a  standard  company  a 
forty-year  term  endowment  policy  for  $5,000 
can  be  purchased  at  the  age  of  thirty  for  an  an- 
nual premium  of  about  $100.  If  the  insured 
dies  before  the  age  of  seventy  his  family  receives 
the  $5,000;  otherwise  he  himself  receives  that 
amount  when  he  reaches  that  age.  If  then  he 
has  no  dependents,  or  if  he  has  no  better  use  for 
the  money,  he  can  convert  it  into  an  annuity  of 
about  $700.  As  the  salary  of  the  teacher  in- 
creases he  can,  if  he  sees  fit,  purchase  additional 
endowment  policies  to  make  his  capital  at  the 
age  of  seventy,  or  his  annuity  if  he  wants  one, 
as  large  as  may  be  desirable.  If  he  becomes  dis- 
abled before  the  age  of  seventy,  he  can  obtain 
the  accrued  value  of  his  policy;  or  if  he  con- 
tinues to  teach  beyond  the  age  of  seventy  he  can 


PENSIONS  25 

buy  a  larger  annuity.  This  gives  the  teacher 
much  greater  freedom  in  the  use  of  his  savings, 
and  does  not  subject  him  to  the  whim  of  the  ad- 
ministration, as  does  the  enforced  purchase  of 
an  annuity  accruing  at  the  age  of  sixty-five  and 
followed  by  enforced  retirement. 

While  a  mutual  company  established  and  con- 
trolled by  teachers  would  give  them  greater  free- 
dom and  more  advantages  than  a  stock  company 
owned  by  the  Carnegie  Corporation,  it  would 
lack  the  endowment  of  one  million  dollars.  The 
Carnegie  Corporation  may  hold  that  the  price 
of  a  university  professor  is  only  five  dollars  a 
year.  It  is  also  the  case  that  a  small  company 
would  have  the  same  excessive  cost  of  adminis- 
tration as  the  Carnegie  scheme.  Either  com- 
pany, writing  insurance  on  preferred  lives  on 
the  basis  of  the  American  Experience  Table  and 
3J  per  cent,  interest,  would  be  profitable,  but 
the  dividends  might  be  less  than  those  of  the 
standard  mutual  companies  selecting  their  lives 
by  the  usual  methods. 

To  avoid  the  cost  and  loss  of  time  inevitable 
in  the  conduct  of  a  small  insurance  company,  a 
society  of  teachers  might  be  formed  without  cap- 
ital that  would  reinsure  the  lives  of  its  members 
in  one  of  the  standard  companies,  or  one  of  these 
companies  might  be  shown  the  desirability  of  es- 
tablishing a  group  or  department  for  academic 
teachers.    The  companies  are  prevented  by  law 


26  CABNEGIE 

from  giving  preferred  rates  to  preferred  lives. 
This  is  a  curious  social  anomaly.  Bad  risks  when 
known  must  pay  a  higher  premium,  but  pre- 
ferred lives  are  given  no  advantage  for  their 
better  heredity  and  habits.  An  actuary  once 
said  to  the  writer  that  preferred  lives  had  to  be 
obtained  by  his  company  to  balance  bad  risks 
insured  unawares.  That  is  to  say,  university 
professors  must  pay  the  premiums  of  those  who 
fall  into  intemperance  or  contract  venereal  dis- 
ease. Even  when  professions  are  equally  useful 
to  society,  there  appears  to  be  no  reason  why 
teachers  should  pay  the  premiums  of  physicians, 
whose  expectation  of  life  is  probably  five  years 
less. 

The  problem  would  perhaps  receive  the  best 
solution  if  one  of  the  great  mutual  companies 
would  consent  to  form  a  department  for  teach- 
ers and  keep  their  insurance  premiums  in  a 
separate  account,  paying  back  the  dividends 
that  were  earned  by  the  group.  Teachers  would 
earn  the  higher  rate  of  interest  which  money 
now  pays  and  would  in  addition  obtain  insur- 
ance at  the  rate  warranted  by  their  greater  ex- 
pectation of  life.  They  would  be  free  from  the 
control  of  the  Carnegie-Pritchett-Butler  com- 
bination. 

The  question  is  of  vital  importance  for  the 
welfare  of  teachers  and  for  the  future  of  our 
colleges  and  universities.    It  should  receive  care- 


PENSIONS  27 

ful  consideration  while  it  is  still  open.  The  mag- 
nitude of  the  problem  is  enhanced  by  the  fact 
that  it  concerns  closely  the  pension  systems  of 
public  schools,  and  indeed  all  professional,  in- 
dustrial and  governmental  life  insurance,  dis- 
ability allowances  and  old-age  pensions. 


THE  "POLICIES"  OF  THE  CARNEGIE 
COMPANYi 

The  article  on  **Life  Insurance  and  Annui- 
ties for  Academic  Teachers/'  printed  in  the 
issue  of  School  and  Society  for  November  9,  was 
sent  to  a  number  of  college  and  university  pro- 
fessors, with  the  request  for  an  expression  of 
opinion  on  the  subject.  Those  to  whom  the  ar- 
ticle was  sent  were  selected  to  represent  dif- 
ferent subjects  and  institutions,  without  ref- 
erence to  the  writer's  acquaintance  with  them 
or  knowledge  of  their  views.  They  were  asked 
to  check  one  of  the  three  statements  here  repro- 
duced, the  number  of  the  votes  for  each^  being 
as  shown. 

The  plans  af  the  Carnegie  Foundation  for  life  in- 
surance and  annuities  seem  to  be  satisfactory. ...     13 

It  seems  to  be  desirable  to  consider  alternative  plans 
under  the  control  of  the  teachers  concerned 636 

The  recipient  is  not  prepared  to  express  an  opinion 
at  the  present  times 104 

1  Printed  in  School  and  Society,  January  4, 1919.  This 
name  is  used  for  brevity  and  accuracy.  The  Carnegie- 
Pritchett  Company  is  certainly  not  what  it  calls  itself, 
a  ''Teachers  A^ociation."  We  thus  have  three  inter- 
locked concerns — The  Carnegie  Corporation,  with  a  capi- 
tal of  $125,000,000;  The  Carnegie  Poundation,  now  in- 
solvent, and  the  Carnegie  Company,  with  a  capital  of 
$1,000,000. 

2  There  were  six  mixed  ballots. 

8  A  large  part  of  those  who  are  not  prepared  to  express 
28 


PENSIONS  29 

The  Carnegie  Foundation  certainly  received 
an  unlucky  vote;  636  to  13  is  a  majority  not 
often  recorded.  Indeed  an  almost  incredible 
situation  has  arisen,  for  the  Carnegie  Company 
claims  to  have  been  established  for  the  benefit  of 
exactly  those  who  state  by  a  majority  of  fifty  to 
one  that  its  plans  are  unsatisfactory.  We  are 
told  by  the  management  that  the  company  is 
**the  concrete  embodiment  of  those  principles, 
as  finally  reached  with  the  cooperation  of  the 
teachers  in  the  institutions  associated  with  the 
Foundation  and  of  representative  academic  and 
actuarial  societies,*'  but  the  teachers  repudiate 
** those  principles''  with  an  emphasis  of  combined 
opinion  approaching  unanimity. 

In  addition  to  the  vote,  about  two  hundred 
letters  have  been  received,  some  of  them  brief 
notes,  others  detailed  discussions  of  the  situa- 
tion. If  all  of  us  had  as  much  money  to  spend 
on  printing  as  the  Carnegie  Foundation,  it  might 
be  desirable  to  reproduce  the  letters.  It  is, 
however,  only  possible  to  print  some  of  them  in 
full  or  brief  extracts  from  all  of  them.  The 
latter  plan  has  been  followed,  extracts  being 
quoted  from  each  letter  that  expresses  any  opin- 

an  opinion  between  the  tvro  alternatives  and  at  the  same 
time  write  letters  of  explanation  state  that  they  are  op- 
posed to  the  Carnegie  Foundation  scheme,  but  also  object 
to  plans  under  the  control  of  teachers,  because  they  do 
not  trust  the  business  qualifications  of  their  colleagues 
or  because  they  regard  the  existing  companies  as  ade- 
quate. 

3 


30  CABNEGIE 

ion.  The  most  definite  and  striking  sentence  or 
paragraph  has  been  selected  and  this  does  not 
always  represent  the  entire  viewpoint  of  a  letter ; 
but  the  extracts  taken  together  give  a  correct 
and  impressive  exhibit  of  the  consensus  of  opin- 
ion of  college  and  university  professors.  The 
names  of  the  individual  writers  are  immaterial, 
for  we  are  concerned  only  with  the  group,  and 
the  same  reasons  which  make  a  secret  ballot  es- 
sential to  a  democracy  lead  to  the  withholding 
of  the  names.  Most  of  the  writers  would  doubt- 
less have  pleasure  in  giving  their  names  and 
showing  their  complete  letters  to  officers  of  the 
foundation.  The  extracts  here  printed  are  from 
all  letters  received  prior  to  December  1.  Many 
others  have  since  been  received,  extracts  from 
which  will  be  printed  later. 

The  new  Carnegie  Foundation  plan  seems  to  me  prom- 
ising, because  I  believe  that  in  principle  some  contribu- 
tion by  beneficiaries  should  be  made,  and  believe  furi^her 
that  this  contribution  should  be  compulsory,  or  at  least 
unfailing. 

I  should  have  to  depend  upon  the  testimony  of  actu- 
aries as  to  the  new  proposition,  and  they  seem  to  think 
that  is  the  best  way  out  of  the  difficulty. 

It  seems  to  me  that  Mr.  Carnegie  *s  gift  horse  has  been 
looked  too  critically  in  the  mouth. 

I  believe  in  the  idea  of  getting  a  better  plan  from  the 
Carnegie  Foundation,  if  possible. 

I  have  read  your  article  with  great  interest  and  gen- 
eral sympathy.  While  I  do  not  regard  the  plan  of  the 
Foundation  as  entirely  satisfactory,  I  do  not  wish  to  be 


PENSIONS  81 

thought  to  be  expressing  an  opinion  that  it  is  unsatisfac- 
tory faute  de  mieux. 

My  present  view  is  that  alternative  plans  c^ould  be 
considered,  and  particularly  the  plan  which  you  advo- 
cate of  placing  the  whole  matter  of  insurance  under  the 
control  of  the  teachers  concerned.  Nevertheless,  I  still 
am  rather  of  the  opinion  that  the  insurance  of  college 
teachers  should  not  be  absolutely  divorced  from  the 
Carnegie  Foundation. 

Existing  insurance  companies  are  sufficient. 

Of  the  two  plans  pr(^>osed,  I  regard  the  second  as 
preferable,  but  neither  as  desirable. 

I  believe  that  professors  through  an  authorized  agent 
should  inaugurate  an  insurance  system,  but  that  it  should 
be  managed  and  controlled  by  a  reputable  insurance  com- 
pany. 

My  position  is  that  we  should  act  through  the  Ameri- 
can Association  of  University  Professors. 

The  advantage  of  unanimous  action  as  presumably  rep- 
resenting the  profession  is  not  to  be  neglected. 

My  impression  is  that  a  joint  scheme  is  preferable. 

Not  sure  teachers  concerned  could  control  or  adminis^ 
trate  fund,  but  thank  you  for  keeping  up  the  agitation 
and  showing  status  from  time  to  time. 

Personally,  I  would  not  care  to  have  anything  to  do 
with  either  plan.  In  the  interest  of  the  younger  men  in 
the  teaching  profession  I  consider  the  second  as  much 
preferable  and  have  therefore  marked  my  assent  to  it. 

I  do  not  favor  compulsory  insurance. 

I  am  not  in  favor  of  any  plan  of  compulsory  insurance. 

Even  if  it  should  not  prove  feasible  to  carry  through 
any  of  the  proposals  outlined  in  your  article  in  School 
and  Society,  I  should  think  it  better  for  a  university 


32  CABNEGIE 

teacher  to  go  to  one  of  the  old-line  companies  and  pay 
the  regular  rates,  rather  than  to  entrust  his  fortunes  and 
those  of  his  family  to  the  trustees  of  the  Carnegie  Foun- 
dation. 

.  I  have  long  since  lost  interest  in  th«  doings  of  the  Car- 
negie Institution.  I  hope  my  plans  to  be  absolutely  in- 
dependent of  any  expectations  from  their  fund  will  not 
miscarry. 

I  no  longer  have  any  interest  or  confidence  in  the 
Foundation  and  have  thought  only  of  depending  on  com- 
mercial insurance  companies. 

Sometimes  I  think  it  would  be  well  to  go  in  with  them, 
and  sometimes  I  feel  that  there  is  no  use  of  putting  good 
money  after  bad  in  the  hands  of  dishonest  people. 

If  the  Carnegie  Foundation  wishes  to  help  the  financial 
status  of  university  professors,  surely  the  best  plan  is 
one,  often  mentioned  by  you,  of  so  endowing  universities 
that  they  may  make  the  salaries  of  their  professors  for 
life,  with  suitable  provisions  for  widows  or  dependents. 

Your  article  is  both  able  and  interesting.  But  quite 
independently  of  it,  I  should  consider  it  better  judgment 
to  invest  in  a  regular  insurance  company  consisting  of 
business  men,  rather  than  in  an  amateur  organization 
which  dabbles  in  insurance. 

The  teachers  concerned  should  have  some  control  of 
the  provisions  which  are  to  be  made. 

I  should  certainly  be  glad  to  join  any  real  professors' 
insurance  scheme. 

I  have  my  hesitation  whatsoever  in  joining  you  in  the 
statement  that  alternative  plans  certainly  should  be  con- 
sidered and  in  my  judgment  these  ought  to  be  under  the 
control  of  teachers. 

I  don't  care  for  any  protection  after  I  am  sixty-five. 
If  I  have  health  up  to  that  time,  I  shall  provide  for 


PENSIONS  33 

myself  and  if  I  can  not  I  am  not  worth  being  provided 
for  except  possibly  by  pauper  agencies.  What  I  want  ia 
a  little  protection  against  the  nightmare  of  disability 
during  the  years  I  am  struggling  to  make  way  in  a  pro- 
fession where  advancement  comes  slowly  and  where  the 
foimding  of  a  family  is  a  bitter  struggle. 

Buying  insurance  in  the  regular  markets  would  have 
the  added  value  of  being  left  to  the  free  choice  of  the 
purchaser.  Such  a  scheme  would  have  a  further  advan- 
tage of  removing  any  tendency  of  thought  or  policy  con- 
trol by  an  outside  institution  such  as  the  Cam^e  Foun- 
dation or  any  of  the  proposed  substitutes. 

I  resigned  my  professorship  last  June.  After  eighteen 
years  in  service  I  found  that  I  must  better  provide  for 
the  present  and  future  welfare  of  my  family.  I  believe 
that  the  Carnegie  Foundation  has  shown  poor  manage- 
ment by  inexcusably  undertaking  a  plan  that  it  can  not 
fulfiU. 

Teachers  like  all  other  people  should  be  free  to  take 
or  not  take  insurance — and  by  any  method  they  please — 
without  advice  from  others  unless  the  advice  is  requested. 

You  certainly  deserve  the  thanks  of  the  acadOTiic 
world  for  persisting  in  the  good  work.  Whether  enough 
money  can  be  found  among  our  poor  professors  to  or- 
ganize a  mutual  stock  company,  I  know  not. 

If  institutions  are  prepared  to  pay  pensions  as  a  mat- 
ter of  right — as  compensation  for  inadequate  pay  on  ac- 
tive service — well  and  good.  Otherwise  the  matter  would 
better  be  left  to  the  individual  in  my  opinion — or  to  a 
voluntary  association  of  the  individuals. 

I  would  like  to  make  my  vote  stronger. 

No  compulsion  of  any  sort. 

Moat  desirable  to  consider  alternative  plans. 

Thank  you  for  this  clear  and  forceful  discussion.    Will 


34  CABNEGIE 

be  glad  if  I  can  ever  render  any  assistance  along  tliese 
lines. 

It  seems  to  me  that  the  problem  is  very  clearly  pat  and 
analyzed. 

I  heartily  agree  with  you  that  the  conditions  are  very 
undesirable. 

The  mistake  is  to  compel  retirement  at  sixty-five.  The 
proportion  of  men  doing  good  work  up  to  seventy-five  or 
even  later  is  very  considerable  among  scientific  men  and 
scholars. 

If  college  teachers  are  to  be  pensioned  the  inevitable 
tendency  will  be  for  salaries  to  remain  low.  With  low 
salaries  college  teachers  have  slight  freedom  and  limited 
influence. 

On  what  ground  do  the  present  trustees  insist  on 
standing  between  Mr.  Carnegie  and  the  profession  he 
planned  to  serve?  We  now  have  the  agency  that  may 
relieve  them  of  their  burdens. 

It  is  absurd  that  a  foundation  for  the  advancement  of 
teaching  should  put  a  premium  on  the  exploitation  of 
teachers  by  selfish  executives.  But  the  teacher 's  problem 
is  bigger  than  any  question  of  pensions  and,  instead  of 
wasting  much  time  on  the  Carnegie  Foundation,  I  think 
we  should  make  its  benefits,  if  they  are  such,  negligible 
by  a  concerted  effort:  (1)  to  protect  the  older  men  and 
women  now  employed,  (2)  to  encourage  younger  persons 
of  promise  in  the  profession  to  get  out  of  it,  and  (3)  to 
bring  every  effort  to  bear  upon  those  who  are  not  yet  in 
it  to  keep  out  of  it  until  teachers  all  the  way  from  the 
kindergarten  to  the  universities  are  paid  a  salary  con- 
sistent with  financial  self-respect. 

I  have  always  resented  the  scheme  as  a  kind  of  char- 
ity and  I  do  not  think  that  charity  is  a  good  principle, 
but  I  believe  firmly  that  professorial  positions  should  be 


PENSIONS  35 

for  life;  that  the  professors  ebould  be  relieved  of  teach- 
ing only  in  case  of  disability  regardless  of  their  age,  and 
that  either  the  institutions  employing  the  professors  or 
the  whole  nation  should  pay  in  case  of  such  disability 
due  to  sickness,  accident  or  advanced  age. 

I  have  been  watching  with  much  interest  your  fight 
for  a  democratic  government  in  educational  institutions. 
It  seems  to  me  that  in  these  days  when  we  are  talking 
much  of  ** world  democracy,'*  that  you  are  justified  in 
advocating  a  measure  of  ** educational  democracy.** 

Our  president  and  board  of  regents  have  always  been 
wary  of  being  dominated  by  an  educational  taskmaster. 
Personally,  I  have  no  inclination  to  take  advantage  of 
their  plan,  since  I  can  discover  no  guarantee  that  this 
venture  will  have  any  more  success  than  the  former  one. 
It  seems  to  me  to  be  highly  desirable  to  form  a  company 
in  which  teachers  could  profit  by  sound  management  and 
yet  not  pay  the  excessive  costs  of  advertising  and  solici- 
tation. 

It  seems  to  me  the  teaching  profession  should  be  inde- 
pendent from  any  close  corporation.  In  other  words  we 
should  have  democracy  in  education  and  a  freedom  to 
express  our  opinion  on  educational  matters.  I  do  not  see 
how  a  state  institution  could  be  independent  if  it  were 
attached  to  the  Carnegie  Foundation. 

Gtuirantee  of  College  and  University  Pro  feasors:  (1) 
Much  higher  salaries  to  attract  more  men  of  ability  to 
the  profession.  (2)  Life  tenure  or  during  mental  and 
physical  ability  to  perform  his  duties.  (3)  Protection 
against  disability  at  any  and  all  times  and  at  any  age. 
(4)  Protection  for  widow  and  minor  children  at  any 
time. 

I  favor  keeping  clear  of  the  Cam^e  plans. 

With  good  and  fervent  wishes  for  the  success  of  your 
efforts. 


36  CABNEGIB 

One  thing  is  clear — ^that  the  plans  of  the  Carnegie 
Foundation  are  unsatisfactory  and  untrustworthy  . 

It  seems  evident  that  the  Carnegie  Foundation  has 
failed,  and  I  doubt  if  I  could  ever  be  prevailed  upon  to 
contribute  any  part  of  my  small  salary  to  such  manage- 
ment as  the  Foundation  has  enjoyed.  In  fact  I  came  to 
the  decision  some  time  ago  that  I  should  never  subscribe 
to  compulsory  insurance  of  any  sort,  even  if  by  so  re- 
fusing, I  found  it  necessary  to  seek  another  profession. 

The  American  A^ociation  of  University  Professors 
should  not  wait  another  day  to  voice  its  radical  dissent 
from  the  views  of  President  Pritchett  and  his  associates, 
and  to  repudiate  the  Foundation  both  as  an  organ  of 
public  charity  and  of  educational  influence. 

I  have  heard  many  unfavorable  criticisms  of  the  Car- 
negie scheme  which  have  created  a  feeling  of  distrust  in 
my  mind  towards  the  scheme,  but  the  basis  of  the  criti- 
cism has  never  been  clear  to  me  until  I  read  your  article. 
I  welcome  the  enlightenment  and  guidance  which  it 
brings. 

I  have  long  since  lost  confidence  in  the  Carnegie  Foun- 
dation and  last  week  increased  my  life  insurance  to  the 
limit  I  feel  able  to  carry. 

College  teachers  are  said  to  be  poor  financiers,  but  I  do 
not  think  the  Carnegie  Foundation  Trustees  can  hand 
them  much.  It  would  be  unspeakable  to  be  compelled  to 
entrust  one  *s  insurance  to  them. 

Any  scheme  of  insurance,  annuities,  pensions  or  what 
not  that  is  not  based  upon  the  wholly  voluntary  support 
of  those  presumably  to  be  benefited  should  be  rejected 
by  self-respecting  citizens. 

You  have  made  a  real  contribution  to  the  cause  and 
problem  of  teacher's  insurance.  I  think  the  time  has 
come  for  the  college  men  to  take  up  in  earnest  this  vital 
interest  of  the  guild. 


\  PENSIONS  37 

I  am  in  full  sympathy  with  your  sharp  criticism  of  the 
Carnegie  Foundation  administration. 

With  best  wishes  for  strength  and  skill  to  your  right 
arm  in  your  struggle  for  academic  democracy. 

I  am  in  hearty  accord  with  your  article  on  the  Car- 
negie Foundation,  as  well  as  with  your  views  on  other 
subjects  as  far  as  I  have  heard  them  expressed. 

Your  suggestion  seems  to  cover  the  ground  exactly. 
Certainly  the  less  we  have  to  do  with  a  quasi-charitable 
organization  the  better. 

I  have  followed  your  articles  from  the  first  and  always 
agreed. 

Allow  me  to  express  my  sincere  thanks  for  the  stand 
you  have  taken  and  are  taking  against  the  subjugation 
of  teachers  and  investigators.  If  the  present  unfortunate 
conditions  both  intellectually  and  financially  are  not  soon 
ameliorated,  the  professions  mentioned  will  inevitably  be 
avoided  by  all  self-respecting  men  of  ability. 

I  want  to  insure  where  I  can  get  the  best  treatment 
which  does  not  seem  to  be  what  you  name  the  C — P — ^B 
combination;  and  I  like  independence  and  propose  to 
keep  it  even  if  I  have  to  get  out  of  teaching. 

I  am  beginning  to  think  that  any  salary,  any  pension 
is  good  enough  for  men  who  will  put  up  with  the  treat- 
ment professors  do  put  up  with  in  the  matter  of  both 
salaries  and  discipline. 

I  know  the  Carnegie  Foundation  has  made  an  utter 
failure  of  the  work  entrusted  to  it  and  that  it  should  be 
reorganized  or  go  out  of  business. 

I  had  not,  until  I  read  your  admirable  article,  per- 
ceived the  relation  between  the  proposed  annuity-insur- 
ance scheme  and  the  control  of  college  professors  by 
trustees  and  presidents.  I  was,  and  am  still  more 
strongly,  since  reading  your  article,  opposed  to  the  Car- 
negie Foundation  scheme. 


38  CABNEGIE 

I  want  to  thank  yau  for  this  admirable  critique  of  a 
condition  of  affairs  that  concerns  all  of  us.  I  have  for 
years  followed  your  independent  attitude  on  this  and  on 
many  subjects.  While,  of  course,  not  always  in  agree- 
ment upon  smaller  matters,  may  I  none  the  less  take  this 
occasion  to  express  my  substantial  agreement  with  you 
and  admiration  for  your  courage? 

I  hope  it  may  be  possible  to  get  the  benefit  of  insur- 
ance and  endowment  free  from  the  Prussian  control  you 
are  so  valiantly  denouncing. 

I  am  convinced  that  it  is  necessary  for  the  teachers  to 
take  positive  action  by  way  of  defense  against  the  de- 
signs of  the  Carnegie  Foundation.  We  should  never  con- 
sent to  any  scheme  of  pensions  except  one  formed  on  the 
mutual  plan  and  under  the  complete  control  of  the  teach- 
ers themselves. 

You  an;d  Professor  Jastrow  deserve  our  thanks  for 
your  careful  analyse  (moral  as  well  as  financial)  of  the 
mismanagement  of  the  C.  F. 

In  my  opinion  the  Foundation  has  failed  utterly  to  do 
that  for  which  it  was  founded.  I  don't  care  to  express 
any  opinion  as  to  the  incompetence  or  dishonesty  of  those 
who  have  been  managing  it,  but  I  can't  see  how  they  can 
escape  one  charge  or  the  other. 

What  is  needed  is  another  foundation  whose  integrity, 
wisdom  and  financial  stability  renders  it  like  Caesar's 
wife.  I  hope  that  your  activities  in  thM  field  will  bear 
fruit  positive. 

So  far  as  actually  losing  money  is  concerned,  I  pre- 
sume the  Carnegie  Flounderation  has  escaped;  but  why  a 
concern  so  conspicuously  ill-managed,  as  regards  the  main 
purpose  for  which  it  was  publicly  declared  to  be  founded, 
should  expect  to  command  the  confidence  and  respect  of 
trustees  and  faculties  of  American  colleges,  I  can  not  see. 
Its  ** scraps  of  paper"  are  vanderlipped  away  in  a  man- 
ner fiirst  understood  in  Prussia. 


PENSIONS  39 

I  liave  alwajB  been  unalterably  opposed  to  both  the 
principle  and  practise  of  the  Carnegie  Foundation  pen- 
sion fund  for  academic  teachers.  The  whole  plan  has 
always  appealed  to  me  as  a  kind  of  mortgage  upon  the 
energies  and  ambitions  of  the  young  teacher  at  usurious 
rates  of  interest. 

It  is  my  opinion  that  the  proper  course  to  pursue  is,  if 
possible,  to  put  the  affairs  of  the  foundation  in  the  hands 
of  a  receiver;  let  this  receiver  meet  the  existing  obliga- 
tions of  the  foundation  so  far  as  the  funds  will  allow,  and 
go  out  of  business. 

Of  course  no  new  chains  must  be  forged  for  the  aca- 
demic profession;  the  old  ones  are  bad  enough. 

I  entirely  agree  with  you  that  the  Carnegie  system  was 
one  which  was  fraught  with  the  greatest  danger  to  free- 
dom of  thought  and  the  develo^nnent  of  the  social  sci- 
ences. I  am  glad  that  it  was  so  poorly  planned  that  its 
failure  is  assured. 

It  has  always  been  a  mystery  to  me  that  every  single 
teacher  in  private  conversation  sympathizes  with  your 
point  of  view  while  very  few  of  them  dare  openly  react 
against  the  continued  humiliation  inflicted  upon  our  pro- 
fession. .  .  .  Carnegie  plus  our  academic  system  of  ad- 
ministration has  broken  our  back-bones. 

I  have  no  ^rmpathy  with  the  methods  of  "The  Car- 
negie Foundation  for  the  Control  of  Teaching"  (and 
teachers),  because  it  has  been  so  repeatedly  shown  that 
they  were  based  on  incomplete  data,  bad  logic,  and  inex- 
pert specialists,  even  if  they  were  not  tricky  or  worse. 

The  whole  business  is  an  insult  to  the  intelligence  of 
the  teaching  profession — an  excuse  for  keeping  capable 
men  on  starvation  salaries  during  their  productive  years 
in  the  vain  hope  of  having  their  declining  years  provided 
for  by  charity — an  excuse  for  universities  to  discontinue 
retiring  allowances  for  honorable  service. 


40  CABNEGIE 

The  plan  proposed  is  unsatisfactory.  My  impression 
is  that  professors  have  no  confidence  in  the  Pritchett- 
Butler  gang,  and  feel  that  the  sooner  the  Carnegie  Foun- 
dation is  rid  of  this  incubus  the  better. 

The  great  calamity  befalling  professors  in  recent  years 
was  the  giving  of  the  Carnegie  milUonB.  Would  that  he 
had  kept  them. 

It's  just  as  necessary  to  human  freedom  to  shatter  the 
educational  autocracies  as  it  is  to  blow  up  those  of  a 
political  sort. 

The  parallel  with  the  German  situation  is  obvious. 
But  I  suspect  that  the  K^aiser  will  surrender  before 
Pritchett.    There  is  less  excuse  for  the  latter  to  hang  on. 

It  is  going  to  be  hard  enough  to  teach  in  an  American 
university  and  retain  one's  self  respect  apart  from  the 
activities  of  this  Foundation.  What  I  think  we  ought  to 
do  is  to  utterly  ignore  the  Carnegie  Foundation,  and  all 
its  works.  Moreover  we  should  make  it  clear  that  we  do 
so  because  it  has  brazenly  disregarded  all  its  promises, 
and  because  its  only  apparent  raison  d'etre  is  to  exercise 
an  external,  non-academic  control  over  the  souls  of  Amer- 
ican university  teachers. 

Words  can  scarcely  be  framed  to  express  the  criminal 
and  selfish  culpability  of  the  trustees  of  the  Foundation. 
This,  however,  is  only  one  of  the  many  symptoms  of  the 
disease  affecting  our  colleges,  namely  ''presidentitis.'' 

The  original  Carnegie  Pension  Foundation,  as  worked 
out  by  the  board,  is  scandalous  and  the  new  scheme  ap- 
peals to  me  as  even  worse. 

The  conduct  of  the  Carnegie  Foundation  has  been  an 
insult  to  the  intelligence  and  an  affront  to  the  integrity 
of  the  teaching  profession. 

These  statements  are  so  clear  and  direct  that 
comment  is  not  required.     Of  the  eighty-eight 


PENSIONS  41 

letters  only  one  is  mildly  favorable  to  the  Car- 
negie Foundation  and  its  ways,  three  or  four 
are  exculpatory,  the  great  majority  are  severe 
arraignments.  The  letters  also  show  widespread 
discontent  with  the  position  of  the  professor  in 
the  American  university.  This  is  even  more  the 
case  in  the  full  letters  than  in  the  extracts  which 
have  been  selected  with  special  reference  to  the 
Carnegie  plans.  The  situation  seems  to  have 
become  worse,  or  better  understood,  since  the 
present  writer  published  in  1913  three  hundred 
letters  on  the  subject  in  his  book  on  **  University 
Control.'* 

The  '*  Handbook  of  Life  Insurance  and  An- 
nuity Policies  for  Teachers"  has  now  been  pub- 
lished by  the  *  *  Teachers  Insurance  and  Annuity 
Association  of  America,"  and  articles  of  eluci- 
dation and  edification  have  appeared  by  the 
president  of  the  Carnegie  Foundation  and  of 
the  new  company  in  the  Atlantic  Monthly,*  and 
by  the  secretary  of  the  two  corporations  in 
President  Butler's  Educational  Review, 

The  ** Handbook"  is  obviously  from  the  hand 
of  the  same  Mr.  Pecksniff  who  has  produced  the 
unlucky  thirteen  annual  reports  of  the  president 

♦  Conducted  by  Dr.  Pritchett's  fellow  trustee  in  the 
control  of  the  New  York  Evening  Post  under  the  owner- 
ship of  Mr.  Lament,  of  J.  P.  Morgan  and  CJompany,  and 
a  trustee  of  the  Carnegie  Company.  Shall  we  now  find 
in  the  Post  the  vigorous  criticisms  of  the  Carnegie  Foun- 
dation which  appeared  there  when  it  was  controlled  by 
Mr.  Villard  and  when  Dr.  Franklin  was  one  of  the 
editors  f 


42  CABNEGIE 

of  the  Carnegie  Foundation.    We  are  told : 

The  teacher  whose  retirement  allowance  is  secured  by 
a  Deferred  Annuity  policy  on  the  Teachers  Eetirement 
Plan  will  enjoy  a  protection  fundamentally  more  secure 
and  equitable  than  one  whose  reliance  must  be  upon  a 
pension  payable  at  the  discretion  of  a  Board  of  Eegents 
or  of  Trustees. 

A  Non-forfeitable  Pension 

From  the  moment  the  first  premium  is  paid  on  such  a 
policy,  the  teacher  will  become  the  owner  of  a  policy  or 
contract  which  neither  his  employer  nor  the  Association 
will  have  any  power  to  modify  adversely  to  his  interests, 
etc. 

Dr.  Pritchett  actually  informs  us  that  we  can 
trust  his  new  company  because  the  laws  will 
compel  it  to  keep  its  contracts,  whereas  it  is 
within  the  discretion  of  regents  or  trustees  to 
keep  their  promises,  which  they  are  liable  to 
modify  adversely  to  the  interests  of  the  teacher. 
This  has  in  fact  been  done  by  the  trustees  of  the 
Carnegie  Foundation  and  of  Columbia  Univer- 
sity; but  surely  boards  of  regents  and  trustees 
usually  follow  the  ordinary  standards  of  busi- 
ness honor.  It  has  besides  not  yet  been  decided 
by  the  courts  that  a  promise  in  dependence  on 
which  a  teacher  has  acted  is  not  a  contract. 

The  Carnegie  Company  says  it  is  **  created 
not  to  get  but  to  give,  * '  therefore : 

Its  policies,  further,  will  be  free  from  any  speculative 
element;  they  wiU  be  what  is  called  non-participating. 

The  consideration  shown  to  the  teacher  in  free- 
ing him  from  the  ** speculative  element'*  of  re- 


PENSIONS  43 

ceiving  the  dividends  earned  by  his  excess  pay- 
ments on  his  policy  is  truly  Pritchettarian. 

The  company  increases  its  rates  by  11.11  per 
cent,  in  case  the  policy  holder  is  no  longer  em- 
ployed by  a  college  or  university.  The  **Haind- 
book'*says: 

For  technical  reasons,  it  seems  best  to  accomplish  the 
same  result  by  adding  a  small  percentage  to  the  net 
premium  rates  and  providing  for  a  reduction  on  each 
premium  paid  while  the  policy-holder  remains  a  member 
of  the  profession. 

The  ** technical  reasons"  are  to  evade  the  dis- 
crimination laws  which  provide  that  no  com- 
pany **  shall  make  or  permit  any  discrimination 
between  individuals  of  the  same  class  or  of  equal 
expectation  of  life  in  the  amount  of  payment 
or  the  return  of  premiums  or  rates  charged  for 
policies  of  insurance.'*  The  expedient  seems 
to  be  of  somewhat  doubtful  legality.  The  ob- 
ject, of  course,  is  to  make  it  harder  for  a  teacher 
to  escape  from  an  undesirable  position. 

It  is  not  necessary  to  describe  in  detail  the 
policies  offered  by  the  Carnegie  Company  for 
its  ** Handbook'*  has  been  widely  distributed 
and  can  be  obtained  on  application.  They  are 
similar  to  those  of  the  standard  companies  (ex- 
cept the  undesirable  features  of  its  deferred  an- 
nuity), and,  what  is  truly  surprising,  the 
charges  are  also  the  same.  The  ** Handbook'* 
says  of  the  new  company : 

.    Its  situation  is  quite  different  from  that  of  the  solicit- 


44 


CABNEGIE 


ing  company.  Through  an  endowment,  contributed  in  the 
form  of  capital  and  surplus,  it  is  able  to  offer  insurance 
at  cost,  -without  overhead  charges  which  in  the  ordinary 
company  absorb  a  considerable  proportion  of  the 
premiums  paid  by  the  policy-holders. 

It  is  further  said : 

It  is  believed  that  college  teachers  are  subject  to  lower 
rates  than  ordinary  holders  of  insurance  and  that  in  time 
this  should  result  in  a  lowering  of  the  cost  of  insurance 
for  a  group  composed  of  such  teachers. 

After  reading  this  and  much  more  to  the  ef- 
fect, the  teacher  will  be  interested  in  the  follow- 
ing comparison  with  the  rates  of  the  two  largest 
American  companies,  both  mutual  (owned  by 
the  policy  holders  and  returning  the  profits  in 
dividends),  and  a  standard  non-participating 
company. 

PREMIUMS  FOR  $1,000  INSURANCE  AT  AGE  35 


Company 

Ordinary 
Life 

20-Year 
Term* 

30-Year 
Endowment 

Carnegie  Company: 

Teachers 

20.19 
22.41 
21.90 
22.00' 
20.11 

27.57 
30.60 
29.76 
29.76 
27.67 

26.59 

Escaped  teachers 

29.51 

Prudential* 

28.02 

Metropolitan' 

28.02 

Travelers  . 

26  84 

5  The  term  policies  of  the  Carnegie  Company  are  par- 
ticularly  undesirable  for  the  teacher,  because  they  do 
not  contain  the  usual  provision  permitting  renewal 
without  a  medical  examination. 

6  The  rates  quoted  for  the  Prudential  and  Metropoli- 
tan will  be  reduced  by  the  payment  of  dividends. 

■'Endowment  at  age  85. 


PENSIONS  46 

THE  ANNUITY    (MALE)    PURCHASED   BY   $1,000   AT   AGE   65 

Carnegie  Company $113,248 

Prudential 112.61» 

MetropoHtan 116.92» 

Travelers 115.14» 

No  reference  is  made  in  the  ** Handbook'*  as 
to  what  will  be  done  with  the  large  surplus  that 
will  undoubtedly  accumulate  at  the  rates 
charged  by  the  company ;  but  the  charter  reads : 

The  purpose  of  the  corporation  la  ...  to  conduct  its 
business  without  profit  to  the  corporation  or  to  its  stock- 
holders; and  the  corporation  shall  transact  its  business 
exclusively  upon  a  non-mutual  basis  and  shall  issue  only 
non-participating  policies. 

The  trustees  of  the  Carnegie  Corporation  can 
not  divide  the  profits  among  themselves  (except 
by  salaries  such  as  the  Hughes  insurance  inves- 
tigation disclosed),  but  they  can  use  it  for  the 
further  control  of  teachers. 

The  only  adequate  reason  why  a  teacher 
should  purchase  life  insurance  or  an  annuity  in 
the  Carnegie  Company  is  because  he  is  com- 
pelled to  do  so  by  the  institution  which  employs 
him.  The  deferred  annuities,  which  are  the  real 
raison  d*etre  of  the  company,  are  particularly 
adverse  to  the  interests  of  the  teacher.  The  joint 
commission,  on  which  representatives  of  the 
American  Association  of  University  Professors 
came  to  an  agreement  with  Dr.  Pritchett,  adopted 
the  following  provision: 

«  Payable  monthly. 
•  Payable  annually. 

4 


46  CABNEOIE 

The  assoeiatian  will  contract  tliat  if  the  annuitant  re- 
tires from  the  profession  of  teaching  prior  to  the  age  of 
sixty-five,  it  will  return  to  the  annuitant  the  premiums 
that  have  been  paid  to  the  association  by  the  annuitant 
alone  (or  by  the  annuitant  and  his  college),  prior  to  his 
retirement,  with  compound  interest  at  the  rate  of  3i  per 
cent. 

This  right  is  now  withdrawn  and  the  teacher 
once  caught  in  the  net  of  the  company  is  there 
for  life/®  Yet  we  tell  our  students  that  slavery- 
has  been  abolished  in  the  United  States. 

The  control  of  the  professor's  freedom  of  ac- 
tion and  of  thought  is  so  disastrous  that  the 
financial  clipping  to  which  he  is  inured  is  trivial 
in  comparison.  It  may,  however,  be  noted  that 
the  joint  commission  decided  that  the  founda- 
tion should  guarantee  four  and  one  half  per 
cent,  interest  on  the  annuity  payments,  and  that 
this  is  now  reduced  to  four  per  cent.  No  pro- 
vision is  made  for  insurance  against  disability. 
The  usual  medical  examination  and  statements 
concerning  physical  condition,  etc.,  are  required. 

10  The  Oamegie  Company  also  ignores  the  recommenda- 
tion of  the  joint  commission  that  all  possible  considera- 
tion be  given  to  the  needs  of  older  teachers  who  enter 
the  system.  If  a  man  does  so  at  the  age  of  sixty,  he 
would  have  to  pay  over  $5,000  a  year  to  obtain  an 
annuity  of  $2,500  at  the  age  of  sixty-five.  If  Columbia 
University  requires  all  its  professors  to  purchase  de- 
ferred annuities  and  the  University  of  Chicago  retains 
its  pension  system,  how  can  a  professor  go  from  Chicago 
to  Columbia? 


PENSIONS  47 

The  ** Handbook'*  however,  offers  the  following 
notable  privilege: 

No  physical  examination  is  required  if  the  application 
is  for  a  deferred  annuity,  or  for  a  life  annuity. 

In  fact  the  teacher  who  had  paid  premiums 
for  thirty  years  and  on  reaching  the  age  of  sixty- 
four  finds  that  he  is  suffering  from  Bright 's  dis- 
ease or  cancer,  not  only  is  not  required  to  take 
a  physical  examination,  but  the  company  is  so 
considerate  of  his  interests  as  to  compel  him  to 
purchase  the  annuity.  If  the  teacher  takes  out 
an  endowment  policy  in  a  standard  company, 
he  can,  of  course,  obtain  the  accrued  value  of 
his  policy  (after  three  years  in  some  companies) 
and  on  reaching  the  age  of  sixty-five  he  can  pur- 
chase an  annuity  or  use  the  money  in  any  other 
way  that  he  sees  fit. 

An  inexplicable  provision  of  the  deferred  an- 
nuity of  the  Carnegie  Company  is  that  it  unites 
a  queer  form  of  life  insurance  with  the  annuity. 
If  the  annuitized  teacher  dies  before  the  pay- 
ment of  his  annuity  begins,  the  premiums  with 
interest  are  paid  to  his  heirs  in  120  monthly  in- 
stallments. The  teacher  is,  of  course,  compelled 
to  pay  for  this  insurance  at  the  regular  rates. 
It  is  the  most  undesirable  insurance  possible, 
for  it  is  least  when  most  needed  and  most  when 
least  needed.  If  the  ordinary  $10-a-month  pros- 
pective annuitant  dies  at  the  end  of  the  first 
year,  when  he  may  leave  a  wife  with  young 


48  CARNEGIE 

children,  they  will  receive  $1.02  per  month  for 
ten  years.  After  forty  years  of  payment  the 
accumulation  amounts  to  $11,649.^^ 

The  reverse  form  of  policy  would  be  useful^ — 
the  writer  does  not  understand  why  it  is  not  of- 
fered— in  which  the  premium  is  constant  through 
life  and  the  proceeds  decrease  each  year  with 
decreased  need  and  the  increased  chances  of 
death.  Thus  if  $120  were  paid  annually  (and 
there  were  no  expenses)  the  family  of  the  in- 
sured should  receive  about  $30,000  if  he  died^^ 
at  the  age  of  25,  $20,000  at  35,  $10,000  at  45, 
$5,000  at  55  and  $2,500  at  65. 

A  teacher  with  a  dependent  wife  and  young 
children  should  insure  his  life  for  a  sum  that 
will  yield  at  least  one  half  the  income  that  he 
earns.  This  is  usually  possible  by  the  purchase 
of  term  insurance ;  but  it  can  not  be  done  in  the 
Carnegde  Company  which  limits  its  policies  to 
$10,000,  although  it  provides  for  the  sale  of  an- 
nuities of  the  capital  value  of  $50,000  to 
$100,000.  It  is  further  the  case  that  if  a  teacher 
is  forced  to  purchase  an  annuity,  he  will  find  it 

11  If  the  teacher  invests  his  own  money  and  its  interest 
in  government  bonds  it  will  aanount  to  a  much  larger 
sum  after  forty  years  and  will  in  the  meanwhile  be  de- 
cidedly safer.  But  he  will  lose  the  ''privilege''  of  be- 
ing forced  to  purchase  an  annuity  with  it,  whether  he 
wants  one  or  not. 

1^  The  chances  being  about  4  in  1,000  for  the  general 
population;  the  amount  of  insurance  for  the  teacher 
should  be  at  least  50  per  cent.  more. 


PENSIONS  49 

by  no  means  easy  to  purchase  life  insurance.  In 
advocating  the  plan  that  educational  institutions 
shall  require  the  purchase  of  deferred  annuities, 
leaving  life  insurance  optional  and  even  making 
it  difficult,  the  Carnegie  Foundation  does  what 
it  can  to  cultivate  in  the  young  teacher  a  selfish 
and  even  an  anti-social  attitude.  The  entire 
scheme  is  arranged  to  enable  the  administration 
to  drop  older  teachers  when  it  no  longer  wants 
them. 

According  to  the  plan  of  the  Carnegie  Foun- 
dation and  the  Carnegie  Company,  teachers 
above  the  rank  of  instructor  in  associated  insti- 
tutions are  to  be  compelled  to  purchase  de- 
ferred annuities  to  the  extent  of  10  per  cent,  of 
their  salaries,  5  per  cent,  to  be  deducted  from 
the  salary  and  5  per  cent,  to  be  paid  by  the  in- 
stitution. It  should  be  clearly  understood  that 
the  5  per  cent,  paid  by  the  institution  will  be 
deducted  from  future  increase  in  salary.  When 
this  was  first  stated  by  the  present  writer  in 
1908,  it  was  denied  by  Dr.  Pritchett,  but  he  has 
learned  it  in  the  course  of  his  education,  to 
which  he  so  frequently  refers  in  his  reports  and 
articles.    Thus  the  *  *  Handbook '  *  says : 

Teachers  who  have  followed  the  discussion  of  pensions 
during  recent  years  will  understand  that  the  contribu- 
tion made  by  a  college  or  university  to  a  teacher's  an- 
nuity will  inevitably  in  the  course  of  time  be  considered 
as  a  part  of  his  salary.  This  result  must  always  follow 
on  any  such  arrangement  between  two  parties  who  have 
to  each  other  the  relation  of  employer  and  employee. 


50  CABNEGIE 

There  is  at  the  present  time  imminent  danger 
that  the  management  of  colleges  and  universi- 
ties, in  order  to  annnitize  their  teachers  and 
thus  provide  for  dismissing  them  at  sixty-five 
and  holding  them  in  more  complete  subjection 
in  the  meanwhile,  will  persuade  them  to  accept 
the  annuity  system  on  the  ground  that  it  will 
provide  an  immediate  five  per  cent,  increase  in 
salary,  although  according  to  the  present  value 
of  the  dollars  in  which  salaries  are  paid  an  inh 
crease  of  more  than  50  per  cent,  is  now  over- 
due. The  example  will  probably  be  set  by  such 
institutions  as  Columbia,  Harvard  and  Yale, 
whose  presidents  are  trustees  of  the  foundation 
and  have  assisted  in  framing  the  scheme.  Teach- 
ers may  even  be  told  that  unless  they  accept  the 
plan,  their  institution  will  no  longer  be  asso- 
ciated with  the  foundation  and  their  older  col- 
leagues will  be  deprived  of  the  pensions  now 
promised  by  the  foundation.  It  is  perhaps  to 
prepare  us  for  the  contingency  that  the  founda- 
tion will  once  more  do  away  with  what  it  calls 
**the  expectations''  {i.  e.,  expectations  that  the 
foundation  will  keep  its  promises)  of  teachers, 
that  Dr.  Pritchett  so  frequently  reminds  us,  to 
quote  again  from  the  *  *  Handbook, '  *  that : 

,  No  axrangement  for  such  retirement  will  be  satisfac- 
tory to  either  the  college  or  to  the  teacher  except  one 
that  has  the  definiteness  and  security  of  a  contract. 

The  standard  companies  seem  to  be  in  every 
way  preferable  to  the  Carnegie  Company.    They 


PENSIONS  61 

have  the  advantage  of  reliability  with  no  like- 
lihood of  interference  with  the  freedom  of  the 
teacher.  The  difficulty  is  that  the  cost  is  greater 
with  them,  as  it  is  with  the  Carnegie  Company, 
than  the  teacher  should  be  compelled  to  pay. 
The  premiums  for  insurance  are  based  on  the 
American  Experience  Table,  three  and  one  half 
per  cent,  interest  and  a  loading  for  expenses. 
The  death  rate  of  professors  under  fifty  is  less 
than  half  that  of  the  American  Experience 
Table  and  probably  twenty  per  cent,  less  than 
the  average  of  accepted  risks.  Interest  is  now 
much  higher  than  three  and  one  half  per  cent. 
The  expenses  of  the  standard  companies  are 
over  twenty  per  cent,  of  the  premiums  received 
and  are  largely  due  to  the  cost  of  obtaining  busi- 
ness, which  is  an  added  charge  to  those  who  do 
not  require  solicitation.  Perhaps  a  professor  of 
good  heredity  and  habits  pays  twice  the  net 
value  of  his  insurance. 

Thus  to  take  a  case  where  the  conditions  are 
the  simplest,  in  England  (where  vital  statistics 
are  properly  compiled)  the  death  rate  between 
the  ages  of  25  and  35  is  4.5  per  thousand.  To 
secure  $1,000  insurance  (apart  from  costs)  it 
should  be  necessary  to  pay  only  $4.50  a  year. 
But  this  is  for  the  general  population,  inclu- 
ding defectives  and  criminals,  drunkards,  those 
with  syphilis,  tuberculosis  and  all  sorts  of  dis- 
eases that  would  disqualify  for  academic  posi- 
tions; it  includes  the  submerged  classes,  those 


52  CARNEGIE 

exposed  to  excessive  hours  of  labor  and  abnormal 
risks,  those  improperly  fed,  clothed  and  housed, 
without  education  or  decent  medical  attendance. 

It  is  unscientific  to  make  guesses  concerning 
quantitative  relations,  but  it  seems  probable  that 
the  annual  death  rate  of  academic  teachers  be- 
tween the  ages  of  25  and  35  is  not  more  than  3 
per  thousand,  and  after  a  medical  examination 
it  may  be  not  more  than  2.  They  ought  to  pay 
(if  costs  of  management  are  excluded)  $2  to  $3 
per  $1,000  of  insurance.  But  the  Carnegie  Com- 
pany charges  $8.21,  or  $9.12  to  escaped  teachers. 
It  is  also  the  case  that  the  death  rate  is  lower 
at  the  beginning  than  at  the  end  of  the  ten-year 
period  and  the  company  earns  a  considerable 
sum  in  interest.  If  the  company  should  insure 
ten  thousand  teachers  and  ex-teachers  for  an 
average  of  $10,000  at  an  average  rate  of  $8.50 
per  thousand  they  would  pay  it  $850,000  a  year 
and  it  would  return  to  them  $200,000  to  $300,- 
000.  As  the  Carnegie  is  not  a  mutual  company, 
it  is  not  clear  where  these  profits  would  go ;  but 
it  is  certain  that  it  is  not  the  company  which 
confers  the  benefit. 

The  greater  expectation  of  life  which  the  pro- 
fessor is  assumed  to  have  reverses  the  situation 
in  the  case  of  annuities;  but  the  annuitants 
used  in  the  McClintock  tables  have  also  an  ex- 
pectation of  life  beyond  the  average,  for  those 
do  not  buy  annuities  who  foresee  an  early  death. 
It  is  also  the  case  that  the  lower  death  rate  of 


PENSIONS  53 

professors  is  greater  at  earlier  than  at  later  ages. 
The  duration  of  life  after  seventy  depends  chiefly 
on  original  constitution  or  heredity;  the  death 
rate  under  fifty  is  influenced  largely  by  eco- 
nomic situation,  habits,  exposure  to  risks  and 
the  like,  in  regard  to  which  the  professor  is  favor- 
ably placed.  If  all  teachers  are  forced  by  their 
institutions  to  purchase  deferred  einnuities,  and 
only  acceptable  risks  are  insured,  the  Carnegie 
Company  gets  them  coming  and  gets  them  going. 
The  teacher,  like  the  industrial  worker,  passes 
through  an  economic  life  cycle.  He  must  be 
supported  in  childhood  and  should  be  supported 
until  he  completes  his  education.  Teachers  who 
find  employment  in  one  of  the  Carnegie  institu- 
tions receive  an  average  salary  of  $1,200  at  the 
age  of  28,  which  is  the  average  age  of  marriage. 
However  prosperous  a  married  man  of  twenty- 
eight,  maintaining  the  standards  of  a  university 
teacher,  may  be  on  a  salary  of  $1,200 — ^the 
wages  and  board  of  two  domestic  servants  now 
amount  to  about  $1,600 — he  is  better  off  eco- 
nomically than  he  will  be  later,  if  he  has  chil- 
dren to  support.  He  will  have  a  salary  of  $1,700 
at  the  age  of  35,  and  $500  will  not  feed  and 
clothe  two  or  three  children.  If  the  children  are 
properly  educated,  their  cost  increases  more 
rapidly  than  the  salary  of  their  father,  even  if 
he  is  promoted  in  a  Carnegie  institution.  It  is 
not  until  the  children  become  self-supporting 
and  the  father  is  in  the  fifties  with  a  salary  of 


54  CABNEGIE 

$3,000  that  his  economic  situation  improves 
somewhat.  His  salary  will  not  thereafter  in- 
crease appreciably;  but  he  may  no  longer  sup- 
port dependent  children.  In  the  Carnegie  insti- 
tutions he  is  liable  to  be  turned  off  at  sixty-five 
with  about  half  salary,  now  decreased  through 
the  inability  of  the  foundation  to  keep  its 
promises. 

.Wealth  should  be  distributed  with  reference 
to  both  service  and  need;  some  method  must  be 
found  to  equalize  the  inequalities  that  occur  dur- 
ing the  life  of  an  individual.  Children  are  no 
longer  an  economic  asset  to  their  parents,  least 
of  all  in  the  educated  classes;  neither  can  the 
employer  of  the  father  be  expected  to  pay  for 
them.  But  children  are  of  greater  economic 
value  than  ever  before  to  the  state;  the  children 
of  the  academic  class  are  probably  of  an  aver- 
age economic  value  of  over  $100,000,  in  that 
they  produce  during  their  lives  that  much  wealth 
beyond  what  they  consume.  Ultimately  the 
state  will  pay  for  the  bearing,  the  rearing  and 
the  education  of  its  children.  In  the  meanwhile 
we  face  a  difficult  situation.  It  is  met  by  the 
teacher  in  large  measure  by  not  having  the 
children,  his  average  family  being  about  1.5. 
But  this  is  a  method  undesirable  for  the  indi- 
vidual, disastrous  to  the  state.^^ 

13  The  economic  inequality  of  the  life  cycle  has  been 
made  greater  in  a  curious  way  by  increased  longevity. 
When  the  parents  died  at  the  average  age  of  fifty  their 


PENSIONS  55 

As  the  dependent  child  must  ultimately  be 
cared  for  by  the  state,  so  the  disabled  worker 
should  be  supported  by  the  state.  The  risk  of 
prolonged  incapacity  during  the  working  period 
is  extremely  small  and  the  cost  of  insurance 
should  be  correspondingly  low.  But  the  risk, 
though  remote,  is  a  constant  menace  to  the  un- 
derpaid teacher.  The  Carnegie  Company,  in 
not  providing  for  insurance  againspt  it,  m^kes 
an  exhibit  of  permanent  incapacity  on  its  part. 
The  disability  of  old  age  is  not  of  long  average 
duration.  It  is  normally  provided  for  by  sav- 
ings or  by  the  dutiful  repayment  of  the  chil- 
dren's obligations.  As  has  been  stated  the  in- 
equalities and  risks  of  the  economic  life-cycle 
should  be  equalized  by  the  state.  Until  we  have 
reached  that  stage  of  civilization,  insurance  is 
necessary  and  pensions  may  be  desirable.  So 
we  must  meet  the  immediate  problem. 

Whether  the  Carnegie  Company  can  be  of  use 
is  entirely  dependent  on  its  being  made  either  a 
mutual  company  owned  by  the  policy  holders  or 
a  stock  company  owned  by  representatives  of 
the  academic  teachers  of  the  country.  If  the 
present  owners  are  unwilling  to  agree  to  this, 
they  demonstrate  their  lack  of  good  faith  and 

property  went  to  the  children  ^hen  needed  for  the  suj)- 
port  of  their  own  children.  Now  when  parents  die  at 
the  average  age  of  over  seventy  their  property  goes  to 
their  children  when  least  needed.  Inheritances  should 
go  to  grandchildren. 


56  CARNEGIE 

proclaim  that  they  are  there  not  to  benefit  teach- 
ers, but  to  control  them. 

The  only  objection  to  the  standard  companies 
is  their  excessive  charges.  It  may  be  possible 
to  arrange  with  one  of  them  to  offer  insurance 
and  annuities  to  a  large  group  of  teachers  on 
some  mutual  plan  that  will  enable  them  to  pay 
only  for  what  they  get.  Or  it  may  be  possible 
to  organize  a  new  company  that  will  accomplish 
this  result.  If  university  and  college  professors 
should  establish  an  insurance  company  they 
would  not  transact  its  details;  they  would  only 
elect  trustees  or  directors.  There  is  no  reason 
why  they  should  not  do  so  as  efficiently  as  the 
Carnegie  Corporation.  The  difference  would  be 
that  the  trustees  would  be  elected  by  the  teach- 
ers to  conduct  the  work  in  their  interests  instead 
of  being  appointed  by  Dr.  Pritchett  and  Dr. 
Butler  to  do  as  they  are  bid.  It  is  also  true  that 
the  earned  surplus  would  be  used  for  the  benefit 
of  teachers  instead  of  being  a  menace  to  them. 

There  is  no  warrant  for  the  common  opinion 
that  teachers  and  professors  are  poor  men  of 
business  or  inefficient  in  the  conduct  of  affairs. 
It  requires  executive  skill  to  conduct  a  laboratory 
or  department;  the  professor  of  the  novel  and 
the  stage  survives  only  there.  The  reputation 
of  professors  for  business  incompetence  is  due  to 
absorption  in  their  work,  to  the  inadequate  sal- 
aries they  accept  in  order  to  do  the  work  they 
want  to  do,  and  to  their  futility  in  faculty  meet- 


PENSIONS  67 

ings.  The  latter  situation  is  caused  in  large 
measure  by  lack  of  power  to  accomplish  any- 
thing worth  while  and  is  besides  a  symptom  of 
all  large  groups  meeting  for  discussion  at  long 
intervals.  University  presidents  are  supposed  to 
be  efficient  and  are  selected  for  all  sorts  of  out- 
side jobs  from  the  presidency  of  the  nation 
down  to  pulling  wires  for  Mr.  Barnes  of  Al- 
bany. These  presidents  were  once  professors 
and  have  usually  been  elected  for  traits,  such  as 
success  in  after-dinner  speaking,  not  related  to 
business  efficiency;  they  represent  in  this  re- 
spect about  the  average  level  of  the  professor. 
When  presidents  who  undertake  to  control  hun- 
dreds of  millions  of  dollars  of  university  prop- 
perty,  thousands  of  professors  and  tens  of  thou- 
sands of  students  meet  once  a  year  as  trustees 
of  the  Carnegie  Foundation,  they  prove  more 
hopelessly  inefficient  than  any  college  faculty. 

It  is,  however,  true  that  teachers  are  a  difficult 
group.  They  impose  their  discipline  and  their 
opinions  on  immature  students  and  are  intel- 
lectually individualistic,  they  are  paid  and  con- 
trolled by  superior  officials  and  are  socially  sub- 
missive ;  they  are  consequently  hard  to  lead  and 
easy  to  drive.  But  the  situation  is  not  hopeless. 
The  intellectual  initiative  of  teachers  may  lead 
them  to  see  the  need  of  reforms,  while  their  sub- 
jection to  administrative  machinery  has  become 
so  intolerable  that  they  may  be  driven  to  enact 
their  Magna  Charta.     Real  progress  has  been 


58  CARNEGIE 

made  in  the  organization  of  the  American  As- 
sociation of  University  Professors,  but  we  can 
only  hope  for  a  slow  development  of  the  *' con- 
sciousness of  kind."  When  the  present  writer 
first  proposed  the  establishment  of  such  an  as- 
sociation his  plans  were  more  directly  in  the 
form  of  a  union.  It  might  now  be  desirable  for 
the  more  radical  academic  teachers  to  form  a 
national  union  affiliated  with  the  American  Fed- 
eration of  Labor. 

Agitation  and  the  capitalization  of  discontent 
may  be  unladylike;  but  they  may  also  be  the 
price  of  liberty.  President  Butler  in  his  last 
report  to  the  trustees  of  Columbia  University 
tells  them  what  he  thinks  of  those  whom  he  calls 
** academic  Bolsheviki'*;  but  their  ferment  has 
more  promise  than  the  dry  rot  of  the  rule  of 
Czar  Nicholas.  Liberty,  though  the  name  may 
be  ** soiled  by  all  ignoble  use,"  is  the  religion 
of  the  teacher.  He  must  maintain  at  any  sac- 
rifice his  freedom  of  investigation  and  of 
thought,  his  freedom  of  teaching  and  of  speech. 
If  he  submits  to  the  violation  of  his  intellectual 
integrity,  the  colors  of  his  academic  hood  are 
no  more  honorable  than  the  colors  on  the  syph- 
ilitic face.  University  professors  can  not  allow 
themselves  to  be  placed  in  the  economically  de- 
pendent classes,  for  then  they  are  in  danger  of 
being  forced  into  the  intellectually  dependent 
classes.    And  that  would  be  the  end  of  us. 


THE  VERDICT  OF  COLLEGE  AND  UNIVER- 
SITY PROFESSORS! 

In  general,  I  trust  the  Carnegie  Foundation, 
and  I  am  not  able  to  say  in  what  respect  the  in- 
^surance  plan  could  be  better.  It  seems  to  me  we 
should  be  prepared  to  cooperate,  unless  a  fairer 
and  safer  plan  is  offered  us. 

I  HAVE  a  reasonable  degree  of  confidence  that 
if  I  live  a  few  years  more  I  shall  receive  the  ex- 
pected pension  from  the  Carnegie  Foundation; 
but  I  have  never  based  my  own  conduct  on  this 
expectation.  I  have  never  thought  that  I  had  a 
claim  against  the  foundation.  And  in  general, 
I  believe  life  is  happier  if,  without  pusillanimity, 
claims  are  not  unduly  exaggerated  and  unduly 
pressed,  as  seems  to  me  to  be  the  case  with  those 
professors  whose  voices  are  just  now  most  loudly 
Jieard.  Let  the  professor,  like  the  shoemaker, 
jsftick  to  his  business. 

s  Personally  I  am  satisfied  with  the  scheme 
.worked  out  by  the  Carnegie  Foundation.  What 
J  believe  to  be  an  open-minded  and  efficient  effort 
at  service  has  been  far  too  much  the  subject  of 
attack  by  individuals  who  can  easily  <avoid  hav- 
ing anything  to  do  with  its  benefactions.  On  the 
other  hand,  I  fully  agree  with  you  that  other 

I  1  Extracts  from  all  letters  received  subsequent  to  those 
printed  in  the  article  on  '  *  The  '  Policies  *  of  the  Oarnegie 
CJompany. ' ' 

59 


60  CARNEGIE 

insurance  schemes  should  be  seriously  studied  by 
college  men.  You  have  again  keenly  analyzed  an 
important  situation  and  as  usual  made  a  funda- 
mental contribution  to  the  solution  of  the  prob- 
lem created  by  it. 

I  CONSIDER  the  Carnegie  pension  in  the  light 
of  back  pay  for  the  older  teachers.  The  insur- 
ance and  annuity  company  may  be  a  good  invest- 
ment for  the  younger  teachers. 

I  AM  not  an  expert  in  actuarial  science  and  can 
therefore  offer  no  useful  comments. 

I  AM  not  prepared  to  express  an  opinion  at  the 
present  time  relative  to  the  various  life  insurance 
and  pension  plans  proposed. 

It  would  give  me  much  pleasure  to  assist  you 
in  the  investigation,  so  I  am  particularly  sorry 
.to  be  insufficiently  informed  to  express  an  opin- 
ion on  the  problem  of  academic  insurance  and 
annuities. 

My  personal  opinion  is  that  some  special  form 
of  insurance  and  annuities  for  university  men  is 
desirable  and  the  general  idea  of  the  Carnegie 
Foundation  that  the  institutions  should  pay  part 
of  the  cost  of  the  insurance  is  a  good  one.  How- 
lever,  the  plan  as  proposed  seems  to  me  to  be  lack- 
ing in  so  many  important  details  that  it  is 
scarcely  possible  to  give  an  opinion  either  for  or 
against  at  the  present  time. 

I  AM  assured  by  friends  conversant  with  actu- 


PENSIONS  61 

arial  practise  that  if  the  Carnegie  Foundation 
enters  into  contractual  relations  with  its  benefi- 
ciaries and  the  various  institutions  assume  some 
share  (50  per  cent.)  of  the  premium  burden  it 
would  be  a  good  thing,  as  it  embodies  the  idea  of 
group  insurance  which  would  help  many  not 
otherwise  insurable.  Personally  I  left  the  Car- 
negie Foundation  plans  out  of  consideration  in 
attempting  to  provide  for  my  period  of  inactivity. 

My  own  opinion  regarding  this  plan  is  that  it 
is  probably  as  favorable  a  one  as  we  can  expect 
from  the  foundation.  In  their  original  plans 
they  evidently  undertook  to  do  what  was  impos- 
sible, and  the  present  proposals  are  perhaps  the 
best  way  out  of  the  difficulty.  In  one  respect, 
however,  I  believe  that  the  plans  of  the  founda- 
tion should  be  modified,  namely,  the  members  of 
the  teaching  profession  should  have  a  majority 
in  the  board  of  control  of  the  proposed  insurance 
company. 

The  pension  scheme  evolved  by  the  Carnegie 
Foundation  seems  alluring  on  the  face  of  it,  but 
if  any  compulsory  pension  scheme  is  instituted 
it  should  be  controlled  by  those  whose  money  is 
concerned. 

I  DO  not  think  the  present  plan  should  be  ac- 
cepted without  some  consideration  and  perhaps 
revision,  from  the  point  of  view  of  the  professors. 
Since  the  foundation  was  in  their  interest  and 
they  are  mature  men,  the  adoption  or  rejection 
5 


62  CABNEGIE 

of  it  should  not  he  denied  to  them,  and  should  he 
Qjccepted  or  modified  by  them  at  their  pleasure. 
I  do  not  approve  of  any  compulsory  form  of  in- 
surance. 

Together  with  all  others  who  are  interested  in 
this  matter,  I  have  regretted  greatly  the  repeated 
change  of  plan  that  the  trustees  have  found  neces- 
sity for  making.  .  .  .  Together  with  many  others, 
I  have  heen  looking  to  comparative  freedom 
from  financial  responsihilities  when  my  teaching 
term  is  concluded,  and  I  helieve  that  it  would  be 
unfortunate  materially  to  change  the  funda- 
mental idea  of  the  foundation  in  such  a  way  as 
to  take  away  from  teachers  the  possibility  of 
compensation  when  their  periods  of  service  have 
been  completed. 

The  foundation  had  a  fine  original  aim  and 
the  donor  deserves  our  respect  and  gratitude, 
but  the  present  administration  has  made  so 
many  changes,  not  merely  in  its  rules  but  in  its 
statements  of  underlying  principles,  that  it  can 
neither  receive  nor  expect  the  continued  confi- 
dence of  members  of  our  profession.  I  find  it 
difficult  to  understand,  therefore,  how  any  mem- 
ber of  the  proif ession  can  regard  it  as  otherwise 
than  desirable  to  consider  alternative  plans 
under  the  control  (partial  if  not  complete)  of 
the  teachers  concerned. 

It  seems  to  me  that  the  Carnegie  Foundation 
had  pretty  nearly  the  right  idea  in  the  begin- 


PENSIONS  63 

ning  and  that  it  made  a  great  contribution  to 
educational  progress  by  introducing  it.  It  is  not 
clear  to  me  that  they  were  wise  or  ethical  in  their 
jugglings  with  the  original  plan.  ...  It  is  essen- 
tially unfair  that  the  large  number  of  men  who 
intend  to  do  and  who  will  do  good  work  in  their 
leisure  time  should  be  compelled  to  contribute  to 
the  endowment  of  this  quasi-research  professor- 
ate. The  working  man  loafs  or  enjoys  himself 
outside  his  eight  hours,  without  productive  effort. 
A  producer  ought  not  to  pay  for  the  privilege, 
but  be  paid  for  his  product. 

The  life  insurance  plans  of  the  foundation  are 
not  satisfactory y  but  neither  are  any  of  the  alter- 
native plans.  An  insurance  corporation  is  a  very 
different  sort  of  an  organization  from  the  founda- 
tion. No  matter  how  bad  a  reputation  the  man- 
agers of  the  foundation  may  have  acquired,  it  is 
clear  that  the  insurance  corporation  will  have  to 
carry  out  written  contracts.  ...  I  think  that  we 
should  make  a  very  stiff  fight  to  force  the  founda- 
tion to  prepare  satisfactory  plans. 

Considering  that  the  Carnegie  Foundation  has 
of  itself  stated  that  it  will  be  or  is  unable  to  meet 
the  pensions  expected;  and  also  admitting  that 
there  is  a  considerable  financial  reserve  already 
at  hand  in  this  foundation,  it  would  seem  to  be 
desirable  to  make  a  definite  effort  to  establish 
tentative  coordination  between  a  **  representa- 
tive body  of  teachers"  and  the  Carnegie  Foun- 


64  CABNEGIE 

dation  rather  than  try  to  s&t  up  an  independent 
insurance  company  under  the  sole  control  of  the 
teachers  themselves.  How  such  a  representative 
body  may  he  organized  and  made  authoritative 
I  do  not  know.  From  the  nature  of  the  case  it 
is  not  probable  that  any  compulsory  plans  will 
ever  be  agreeable  to  most  of  the  profession. 

In  discussing  a  Professors  Insurance  Company 
it  seems  to  be  tacitly  assumed  that  such  a  com- 
pany would  have  marked  advantages  over  exist- 
ing insurance  companies.  In  the  case  of  the 
Presbyterian  Ministers'  Fund  I  believe  the  rates 
are  unusually  low.  Are  there  other  special  com- 
panies of  this  sort  which  show  similar  low  rates  ? 
Can  not  we  have  a  report  on  this  company  and 
other  similar  companies,  if  they  exist,  by  a  com- 
petent actuary,  showing  why  these  rates  are  low 
and  whether  professors  might  expect  similar 
rates  in  a  new  company  formed  in  the  near  fu- 
ture? Unless  some  distinct  advantage  could  be 
almost  guaranteed  in  a  special  company  most  of 
us  would  prefer  to  deal  with  the  old  reliable  com- 
panies. 

I  BELIEVE  in  cooperative  insurance.  Only  com- 
petent actuaries  can  judge  whether  a  proposed 
scheme  will  work.  I  am  glad  to  see  the  Carnegie 
millions  do  any  good  they  can  do.  But  first  I 
should  like  to  see  the  foundation  carry  out  Mr. 
Carnegie's  expressed  purpose. 

Publicity  and  fair  criticism  are  having  a  most 


PENSIONS  66 

wholesome  effect,  and  the  teaching  profession  is 
very  greatly  indebted  to  you  for  your  work  and 
influence  along  these  lines. 

I  AM  in  favor  of  the  plan  under  teachers'  con- 
trol ;  that  this  should  be  worked  out  carefully  by 
a  committee  appointed  by  the  Association  of 
University  Professors. 

I  FAVOR  the  Carnegie  Foundation  submitting 
a  plan  that  the  teachers  may  voluntarily  accept. 

I  AM  enclosing  my  ballot  on  the  matter  of  life 
insurance.  Many  thanks  for  your  illuminating 
article  on  the  subject. 

You  may  record  my  vote  under  the  head  **It 
seems  desirable  to  consider  alternative  plans, 
etc.*' 

,  Permit  me  to  add  that  I  have  read  your  ar- 
ticle with  much  interest  and  appreciation. 

Consideration  of  alternative  plans  is  de- 
cidedly advisable. 

I  VOTE  heartily  [for  alternative  plans]. 

I  AM  quite  clear  that  it  is  highly  desirable  to 
consider  alternative  plans  under  the  control  of 
the  teachers  concerned. 

I  SHOULD  like  to  see  a  life  insurance  society  for 
teachers  modeled  on  that  of  the  Presbyterian 
clergy. 

The  Carnegie  Foundation  plan  does  not  seem 
to  -be  satisfactory. 


66  CABNEGIE 

I  CAN  only  voice  my  doubt  and  dissatisfaction 
in  regard  to  the  pension  situation. 

Professors  do  not  wish  insurance  and  annui- 
ties, but  adequate  salaries. 

I  AGREE  with  those  who  think  we  should,  if  pos- 
sible, act  through  the  American  Association  of 
University  Professors.  I  dislike  the  notion  of 
compulsory  insurance. 

Neither  the  Carnegie  Foundation  nor  the  dis- 
cussions to  which  it  has  given  rise  have  added,  it 
seems  to  me,  dignity  to  the  teaching  profession. 
While  personally  rejecting  it  under  any  guise,  I 
marked  the  second  plan  in  the  interests  of  those 
who  hope  for  its  future  helpfulness. 

Much  interested  and  amused  by  outpourings 
of  professors  recently  published.  No  doubt  sin- 
cere, but  they  do  not  talk  that  way  even  in  fac- 
ulty meetings,  much  less  in  public.  We  are  as 
much  an  anonymous  profession  as  editors. 

I  SHOULD  like  to  see  the  Carnegie  fund  applied 
to  carrying  out  its  promises  as  far  as  it  will  go. 
I  think  it  has  been  useful  as  an  object4esson. 
First :  in  showing  what  a  terrible  need  there  was 
of  relief.  Second :  it  actually  has  helped  a  goodly 
number  and  deserving  people.  Third:  it  has 
shown  how  not  to  do  the  thing  it  set  out  to  do. 

I  CONSIDER  the  Carnegie  plan  very  unsatisfac- 
tory. The  alternate  plan  is  the  lesser  of  the  two 
evils.    Compulsory  insurance  may  work  to  the 


PENSIONS  67 

advantage  of  some  of  the  younger  men  in  the 
teaching  profession.  Personally,  however,  I 
should  prefer  to  get  my  insurance  from  the 
existing  companies. 

No  insurance  plan  should  be  approved  that 
contains  a  compulsory  provision.  Any  plan 
worthy  of  being  supported  because  of  aid  or  pro- 
tection which  it  may  offer  to  the  teaching  pro- 
fession should  be  subject  to  the  control  of  the 
teachers  themselves. 

I  DOUBT  whether  it  is  desirable  to  obtain  a  more 
** democratic'*  administration  of  the  Carnegie 
Foundation.  The  most  satisfactory  course,  apart 
from  provision  by  the  individual  institutions,  is 
that  of  securing  some  properly  preferential 
treatment  from  the  established  insurance  com- 
panies. 

I  AM  quite  strongly  of  the  opinion  that  any 
plan  for  the  pensioning  of  university  teachers 
should  be  entirely  divorced  from  The  Carnegie 
Foundation.  I  trust  that  the  committee  of  the 
American  Association  of  University  Professors 
will  continue  its  study  of  the  problem,  and  be 
able  to  present  at  some  annual  meeting  a  plan 
for  the  self-insurance  of  the  teachers,  supple- 
mented possibly  by  partial  payments  from  the 
universities.  This  plan  preferably  should  be 
worked  out  in  connection  with  one  or  more  of  the 
old4ine  companies. 


68  CABNEGIE 

I  HAVE  only  bad  a  doubtful  confideiice  in  tbeir 
various  plans  from  tbe  beginning,  wbicb  bas  di- 
minisbed  as  I  bave  gatbered  information  from 
casual  sources.  From  tbe  first  I  bave  continued 
my  insurance  and  otber  financial  arrangements 
in  complete  disregard  of  tbe  Carnegie  Founda- 
tion. From  wbat  I  know,  tberefore,  I  certainly 
would  not  vote  tbat  tbeir  plan  is  satisfactory. 
On  tbe  otber  band,  my  opinion,  I  must  say,  is 
one  of  prejudice.  Tberefore,  baving  so  mucb 
f aitb  and  confidence  in  your  integrity,  I  would 
ratber  leave  it  tbat  if  you  tbink  my  vote  can 
fairly  be  placed  as  favoring  alternative  plans, 
you  may  place  it  tbere. 

My  own  opinion  is  tbat  it  would  be  mucb  better 
if  money  available  for  sucb  purposes  were  given 
to  various  institutions  for  tbe  express  purpose 
of  increasing  tbe  salaries  of  tbe  professors,  leav- 
ing it  to  tbem  to  make  personal  arrangements 
for  tbeir  old  age.  College  salaries  at  present  are 
not  a  living  wage. 

I  AM  opposed  to  retirement  at  sixty-five  and  to 
any  compulsory  plan  of  insurance.  I  favor  de- 
cidedly bigber  salaries,  so  tbat  tbe  university 
professor  may  provide  for  bimself  and  bis  family 
instead  of  depending  on  otbers  to  do  so  wben  bis 
days  of  service  are  over. 

I  OBJECT  to  compulsory  insurance.  I  consider 
tbat  neitber  tbe  Carnegie  Foundation  nor  tbe 
regents  of  a  university  bave  tbe  rigbt  to  decide 


PENSIONS  69 

how  an  instructor  shall  be  insured.  It  seems  to 
me  that  any  plan  of  dictatorial  insurance  inter- 
feres with  the  personal  rights  of  an  individual. 
Existing  insurance  companies  are  sufficient. 
Therefore  I  consider  the  Carnegie  proi)osals  as 
meddling  interference. 

The  ordinary  professor  would  feel  very  much 
better  about  the  matter  in  question  could  he  be 
assured  that  the  i)ension  system  would  be  man- 
€iged  by  the  men  most  interested — i.  e.,  by  the 
professors  themselves — and  could  he  also  have 
in  some  way  his  confidence  in  the  Carnegie 
Foundation  restored. 

It  may  be  that  the  foundation  can  not  extricate 
itself  from  its  present  difficulty  without  working 
injustice ;  but,  if  so,  a  frank  admission  of  the  in- 
justice might  help  to  restore  confidence  in  its  in- 
tentions. 

I  AM  entirely  out  of  sympathy  with  the  present 
management  of  the  Carnegie  fund. 

I  MOST  emphatically  desire  salary  enough  to 
do  my  own  providing  for  the  future  for  myself 
and  family.  No  scheme  of  salary  held  back  is 
trustworthy. 

It  seems  to  be  desirable  to  consider  alternative 
plans  under  the  control  of  the  teachers  con- 
cerned. I  have  confidence  in  their  ability,  hon- 
esty and  earnestness. 

From  the  first  the  Carnegie  Foundation  has 


70  CARNEGIE 

been  a  disappointment,  and  I  am  no  longer  in- 
terested in  its  plans  or  work. 

We  have  our  own  pension  fund  having  been 
excluded  from  tfhe  Carnegie  by  reason  of  *' sec- 
tarianism. ' '  It  is  the  kind  of  sectarianism  I  now 
appreciate. 

It  used  to  be  a  cause  for  complaint  in  that  we 
were  not  on  the  foundation  but  as  things  have 
turned  out,  there  is  no  one  now  who  regrets  that 
we  are  still  *'off."  Surely  it  is  desirable  that 
plans  such  as  you  suggest  should  be  considered. 
The  Carnegie  proposition  I  would  have  none  of. 

If  I  wanted  insurance  I  certainly  should  not 
go  to  the  Carnegie  board  for  it.  There  is  in  my 
mind  no  doubt  that  the  original  purpose  of  the 
foundation  was  good.  Unfortunately  the  trus- 
tees' selected  have  not  proved  themselves  to  be 
the  proper  persons. 

Since  receiving  the  Handbook  of  Insurance 
and  Annuities  for  Teachers  I  have  made  up  my 
mind  to  keep  such  insurance  as  I  have  in  the 
standard  companies  and  get  more  of  the  same 
kind  when  I  can. 

Like  any  successful  business  man,  the  teacher 
should  be  in  a  position  to  provide  for  himself 
and  to  choose  the  kind  of  insurance  he  regards  as 
best  suited  to  his  situation.  I  resent  charity  and 
never  have  banked  on  any  assistance  other  than 
might  come  through  my  own  efforts. 


PENSIONS  71 

I  BELIEVE  that  the  people  concerned  should 
have  a  part  in  managing  and  controlling  any 
system  of  pensions.  This  viewpoint  seems  to  me 
to  coincide  with  the  increased  demand  at  the 
present  time  for  a  greater  amount  of  world 
democracy.  I  do  not  feel  that  educational  insti- 
tutions should  ibe  an  exception  to  this  world 
movement  for  a  greater  human  liberty. 

The  past  management  of  the  pension  fund  has 
caused  me  to  lose  all  confidence  and  interest  in 
it,  and  while  I  do  not  know  that  I  am  opposed  to 
any  movement  among  the  teachers  themselves  to 
form  an  insurance  company,  I  had  expected  to 
look  to  commercial  insurance  for  anything  in 
that  line. 

I  WOULD  have  no  compulsory  insurance.  If 
any  benefit  can  come  from  the  foundation  it 
should  be  to  make  the  insurance  cheaper  for  col- 
lege teachers.  The  system,  whatever  it  shall  be, 
must  be  reliable,  and  it  should  make  the  benefi- 
ciary really  independent  instead  of  dependent — 
independent  not  only  as  regards  an  old  age  of 
poverty,  but  independent  to  carry  on  his  investi- 
gations as  the  truth  may  lead  him  while  he  has 
no  emeritus  before  his  name. 

I  DISTINCTLY  prefer  a  plan  other  than  the  new 
Carnegie  plan,  but  am  not  a  competent  enough 
business  woman  to  be  sure  which  of  the  proposed 
alternates  is  the  best.  I  can  not  overstate,  I 
think,  the  sense  of  obligation  I  feel  to  you  for 


72  CABNEGIE 

your  unflagging  zeal  in  a  matter  so  intimately 
conneeted  with  the  efficiency  and  the  dignity  of 
our  profession. 

I  NEVER  did  take  much  interest  in  the  founda- 
tion and  its  plans.  I  have  never  anticipated  re- 
ceiving any  kind  of  benefit  from  it.  I  am  not  in 
favor  of  compulsory  insurance.  It  may  be  p(^- 
sible  that  a  satisfactory  plan  of  insurance  for 
teachers  may  be  developed,  but,  as  for  myself,  I 
am  inclined  to  trust  to  my  own  plans  and  to 
the  regular  old^line  insurance  companies  for  pro- 
tection. 

Eeqarding  life  insurance,  I  believe  that  every 
man  should  be  free  to  determine  what  provision 
he  should  make  for  himself  and  family.  The  sug- 
gestion with  which  you  close  your  article  on  this 
subject  in  School  and  Society,  that  one  of  the 
great  mutual  companies  might  make  a  separate 
department  for  teachers,  I  believe  to  be  a  good 
one»  I  have  never  had  any  great  faith  in  the 
plans  of  the  Carnegie  Foundation  and  conse- 
quently do  not  expect  to  be  disappointed. 

,  The  problem  of  providing  for  one's  old  age  is 
one  that  has  to  be  faced  in  all  occupations,  and  I 
see  no  reason  why  the  teaching  profession  should 
be  singled  out  for  paternalistic  treatment  in  this 
particular.  If  money  is  to  be  spent  in  providing 
pensions  for  teachers,  I  should  prefer  to  have  it 
used  to  make  sufficient  increase  in  salaries  to 
permit  the  purchase  of  annuities  through  the  reg- 


PENSIONS  73 

ular  insurance  companies,  and  then  leave  it  to 
each  individual  to  decide  whether  or  not  to  use 
the  increase  in  this  way. 

I  CAN  not  believe  that  it  is  right  to  accept  a 
pension  in  the  form  of  charity  bestowed  by  some 
private  corporation,  whether  they  call  it  a  *  *  foun- 
dation'' which  arises  after  a  man  has  become  so 
rich  that  he  can  not  give  his  money  away,  or 
whether  it  is  doled  out  straight  from  his  gener- 
ous overflowing  soul.  ...  If  our  teachers  and 
professors  and  industrial  workers  who  live  by 
salary  or  day  wage  are  worthy  of  pensions,  then 
those  pensions  should  be  arranged  for  in  some 
sensible  manner  as  coming  direct  from  all  of  the 
people — governmental  sources. 

Many  teachers  are  improvident  and  need  a 
compulsory  pension  system,  which  is  an  argu- 
ment in  favor  of  the  same.  Many  other  teachers 
are  independent  in  their  thoughts  and  actions 
and  also  far-sighted  and  provident  for  the  fu- 
ture; to  such  men  a  compulsory  system  is  ab- 
horrent. To  the  latter  type  of  man  particularly 
is  the  idea  also  abhorrent  that  he  be  held  from 
full  freedom  of  action  by  a  pension  system  de- 
pendent in  part  at  least  upon  the  good  will  of  the 
school  employing  him.  In  other  words,  the  inde- 
pendence of  the  teacher  must  be  maintained. 

During  the  last  fifteen  years  there  has  oc- 
curred nothing  to  warrant  our  taking  much 
stock  in  the  stability  of  the  Carnegie  Foundation. 


74  CABNEGIE 

Fupthermore,  I  believe  that  the  salaries  of  pro- 
fessors should  be  such  that  by  frugality  they 
fc;hould  be  able  to  provide  for  themselves  and  their 
dependents  adequately  when  old  age  comes  upon 
them.  ...  I  wish  to  see  something  done  for  the 
professors  now.  Then  under  correct  conditions 
let  them  look  to  their  own  futures.  I  am  opposed 
to  any  thing  that  has  a  tendency  to  make  a  man 
a  dependent  in  his  old  age. 

After  reading  the  plans  past  and  present  I 
have  no  great  interest  in  them.  I  carry  life  in- 
surance, yet  I  do  not  anticipate  that  I  shall  will- 
ingly take  insurance  under  .the  new  plan.  By  re- 
maining single  I  hope  barring  disability  <to  be 
able  to  take  care  of  my  own  future  without  being 
under  a  yoke.  I  regret  that  I  must  seem  un- 
grateful for  Mr.  Carnegie's  gift,  given  no  doubt 
in  the  finest  spirit,  but  the  manner  of  its  admin^ 
istration  has  made  it  a  menace. 

To  Mr.  Carnegie  himself,  in  my  mind,  is  due 
great  credit  for  a  grand  idea  and  a  sincere  effort 
to  establish  that  idea  as  a  recognized  principle. 
The  unfortunate  outcome  is  due  simply  to  the 
bad  administration.  Instead  of  making  the  orig- 
inal fund  a  nucleus  to  which  other  agencies 
would  gladly  add  to  build  up  a  secure  position 
for  teachers,  the  administration  sought,  with  the 
power  that  the  inadequate  capital  gave  them,  to 
acquire  a  personal  control  of  the  educational 
policies  of  the  country.  Wise  as  some  of  the  dic- 
tated policies  doubtless  were  the  effect  was  bad. 


PENSIONS  75 

Instead  of  serving  as  an  impetus  for  further  de- 
velopment of  the  principal  of  safeguarding  the 
professor,  other  efforts  were  effectively  blocked. 
An  insurance  against  premature  accident  or  old 
age  is  most  desirable  if  it  comes  from  a  society  at 
large  and  as  a  right  due  the  dignity  of  the  pro- 
fession, but  no  one  wants  to  depend  on  a  pension 
dictated  by  a  presumptuous  administrator  of  a 
private  charity. 

I  SHALL  not  hesitate  to  advise  any  of  my  col- 
leagues that  their  own  financial  interests,  to  say 
nothing  of  their  academic  relations,  will  be  best 
served  by  taking  insurance  in  one  of  the  regular 
companies  making  their  choice  of  policy  after 
careful  consideration  of  all  of  the  essential  fac- 
tors involved  in  each  of  their  individual  cases. 
Inasmuch  as  the  foundation  seems  very  lately  to 
have  discovered  that  the  best  form  of  **  benefi- 
cence** should  be  placed  on  a  ** contractual*' 
basis,  there  is  but  one  conclusion  which  every 
member  of  the  profession  can  entertain,  namely, 
to  seek  insurance  where  contracts  are  guaranteed 
by  law,  and  where  the  basis  of  cost  and  profit  is 
adequate  to  stabilize  the  monetary  return — un- 
less teachers  might  find  a  way  whereby  the  highly 
selected  character  of  their  insurance  risk  can  be 
discounted  by  corresponding  reduction  in  rates 
or  an  increase  in  preliminary  returns. 

I  HAVE  ceased  to  take  any  great  interest  in  the 
plans  of  the  Carnegie  Foundation.    I  thought  its 


76  CAENEGIE 

plan  of  insurance  was  inadequate  and  promised 
little  advantage  as  compared  with  the  plans  of 
other  insurance  companies.  ...  I  am  tempted  to 
think  that  the  American  University  Professors' 
Association  could  accomplish  more  if  it  turned 
its  attention  toward  getting  legislation  establish- 
ing an  allowance  and  pension  system  in  case  of 
disability  and  retirement  for  age.  This  is  akin 
to  my  thought  that  the  same  association  could 
accomplish  more  in  behalf  of  academic  freedom 
and  salaries  by  becoming  a  trade  union  and  co- 
operating with  labor  organizations.  Had  we  not 
better  trouble  ourselves  more  about  the  question 
of  a  fair  distribution  of  wealth  and  income?  If 
justice  were  meted  out  to  all  we  would  have  less 
need  of  pensions. 

When  I  was  called  to and  the  letter  men- 
tioned that  it  was  on  the  Carnegie  list,  I  at  once 
figured  what  that  was  probably  worth  in  terms 
of  salary  addition.  On  the  principle  of  not  cry- 
ing over  spilt  milk  or  looking  a  gift  horse  in  the 
mouth,  I  should  not  care  to  discuss  whether  the 
money  might  not  have  been  more  wisely  applied 
in  enabling  college  after  college  to  start  its  own 
pension  system,  taking  off  the  burden  of  accrued 
liabilities,  or  otherwise.  But  when  it  is  proposed 
to  organize  an  institution  which  is  to  accept  fu- 
ture payments,  the  prospects  for  the  future  must 
inevitably  be  judged  by  the  records  of  the  past. 


PENSIONS  77 

It  would  be  morally  objectionable  to  compel 
any  teacher  in  service  now  to  insure,  though 
there  would  not  be  the  same  objection  (to  a  raise 
in  salary  to  be  devoted  to  that  specific  purpose. 
Nor  do  I  think  there  is  any  prospect  of  so  inde- 
fensible a  course  as  compelling  a  teacher  to  in- 
sure in  a  particular  company,  particularly  one 
whose  rates  were  higher  than  larger,  stronger  and 
older  companies. 

The  more  I  think  about  the  whole  situation  of 
pensions  of  any  kind  for  teachers,  the  more  I  dis- 
like the  idea  from  the  point  of  view  of  the  main- 
tenance of  individual  self-respect.  I  think  there 
is  another  answer  to  the  whole  question,  although 
of  course  we  must  not  be  too  academic  in  discus- 
sing it.  In  other  words,  we  must  not  forget  that 
it  is  a  condition  we  are  facing.  The  necessity  for 
a  retirement  fund  for  teachers  or  some  form  of 
compulsory  insurance  is  in  the  last  analysis  based 
upon  the  fact  that  teachers  are  underpaid.  Why 
should  this  continue?  Would  it  not  be  desirable 
to  make  a  fight  for  adequate  payment  of  teachers, 
end  by  adequate  payment  I  mean  salaries  which 
would  be  suflBciently  large  to  permit  of  proper 
living  conditions  and  at  the  same  time  to  leave 
enough  surplus,  so  that  the  individual  could  him- 
self or  herself  provide  for  old  age  through  the 
usual  channels,  i.  e.,  regular  insurance  companies. 
It  seems  to  me  that  such  conditions  would  be 
much  more  compatible  with  self  respect  than  the 
6 


78  CABNEGIE 

present  conditions,  which  it  is  apparently  as- 
sumed are  to  continue  indefinitely. 

.  Unless  the  foundation  can  provide  insurance 
at  considertably  less  cost  than  the  established  in- 
surance companies,  I  should  think  most  men 
would  prefer  the  standard  insurance  companies. 
Personally,  if  I  were  a  young  mian  just  starting 
out  I  should  hesitate  a  long  time  before  I  would 
engage  in  college  or  university  work,  so  far  as 
pensions  or  compensation  are  concerned.  I 
should  prefer  public  school  work.  I  was  in  pub- 
lic school  work  for  a  good  many  years.  It  is 
much  less  unattractive  than  college  professors 
usually  imagine,  and  the  financial  and  personal 
situation  of  college  professors  is  less  attraictive 
than  it  seems  to  persons  from  the  outside.  There 
are  many  reasons  for  this  which  it  would  take  a 
long  letter  to  state,  and  which  you  probably 
know  better  than  any  one  else,  as  you  have  made 
a  very  extensive  study  of  the  various  aspects  of 
university  administration.  I  may  add,  however, 
that  it  is  a  significant  thing  that  nowadays  col- 
lege professors  in  a  number  of  instances  which 
have  come  to  my  notice,  are  privately  advising 
their  students  to  go  into  high-school  work  rather 
than  college  work. 

I  HAVE  for  many  years  been  dissuading  young 
men  who  consulted  me  from  aiming  to  enter  our 
profession.  The  new  pension  plan,  combining 
stout  leading-strings  with  an  unpTeasiantly  pat- 


PENSIONS  79 

ronizing  attitude,  would  increase  my  reluctance 
to  enter  on  an  academic  life  if  I  were  beginning 
over  again. 

Some  years  ago  I  abandoned  attention  to  the 
whole  Carnegie  Foundation  scheme,  jxartly  be- 
cause I  took  much  stock  in  the  argument  that  it 
pauperizes  the  profession  and  subjects  the  men 
to  arbitrary  government.  Perhaps  in  this  last 
matter  I  .am  wrong.  The  adequate  payment  of 
teac^hers  is  one  of  the  most  important  things  in 
modem  life ;  if  the  profession  can  not  be  recom- 
pensed, second  and  third  class  people  will  be  in- 
trusted with  the  education  of  our  boys  and  girls 
and  with  the  tasks  of  research — if  indeed  we  are 
to  have  either  education  or  research. 

.  I  THINK  that  those  who  originally  balked  at  the 
Carnegie  arrangement  were  long-headed  in  their 
suspicions.  I  did  not  see  as  clearly  as  they  the 
effect  that  such  a  promise  of  protection  would 
have  upon  our  universities  to  which  belongs  in- 
alienably the  duty  to  guard  faithful  servitors 
against  the  accidents  of  life  and  its  old  age  disa- 
bilities. Personally  I  have  never  had  the  slight- 
est possible  comfort  from  the  Carnegie  promise. 
...  I  query  whether  we  teachers  could  run  our 
own  insurance  company — perhaps  we  could — but 
I  do  wish  that  the  American  Association  of  Col- 
lege Professors  or  some  simdliar  representatives 
of  the  profession  might  bave  some  immediate 
control  of  the  funds  so  generously  given  by  Mr. 
Carnegie. 


80  CABNEGIE 

^  The  Carnegie  Foundation  has  lost  the  confi- 
dence of  college  teachers  because  of  its  failure  at 
the  start  to  foresee  the  financial  diflfieulities  which 
would  result  from  its  original  plan,  and  for  the 
disingenuous  'atti1;ude  of  its  authorities  when  it 
became  necessary  (to  modify  and  finally  to  aban- 
don that  plan.  As  a  result,  such  teachers  look 
with  disfavor  upon  compulsory  insurance  in  a 
company  in  the  mianagement  of  which  the  present 
authorities  of  the  foundation  have  any  voice. 
Nor  is  a  mutual  company  directed  by  college 
teachers  with  limited  insurance  experience  and 
scanty  capital  likely  to  command  more  confidence. 

The  situation  seems  to  me  to  be  one  which  can 
only  be  cleared  up  by  a  series  of  law  suitS' ;  either 
the  Carnegie  people  are  right  or  they  are  wrong 
in  thinking  that  they  ©an  make  and  break  prom- 
ises at  will ;  either  university  professors  are  right 
or  are  wrong  in  thinking  that  they  have  a  legal 
interest  in  the  Carnegie  Foundation  for  academic 
insurance.  These  questions  are  of  great  impor- 
tance to  the  academic  profession.  If  the  pro- 
fessors on  the  Carnegie  Foundation  have  actually 
a  legal  interest  in  the  funds  of  the  foundation 
they  are  entitled  to  a  say  in  the  management  of 
,the  funds.  This  can  only  be  determined  by  the 
courts.  I  would  therefore  suggest  that  some  re- 
sponsible ibody,  like  the  American  Professors, 
shall  take  up  in  detail  the  various  published  pro- 
grams or  promises  of  the  Carnegie  Foundation ; 


PENSIONS  81 

thalt  they  shall  carefully  go  over  the  ground  end 
find  out  what  universities  made  definite  changes 
and  concessions  in  order  to  take  advantage  of  the 
foundation's  offer;  that  they  shall  select  a  suit- 
able individual  from  the  teaching  staff  of  one 
such  university  in  whose  case  the  promises  have 
not  been  fulfilled  and  shall  bring  suit  to  enforce 
the  fulfilment  of  the  contract. 

I  SAY  emphatically  that  I  regard'  the  proposed 
plan  as  unsatisfactory.  I  do  nott  see  that  the 
plan  interests  members  of  faculties  of  state  uni- 
versities, as  I  feel  sure  that  the  states  would  not 
make  the  payments  required  of  them,  and  I  oer- 
tainly  would  not  favor  compufeory  payments  by 
the  professors  themselves.  For  myself  I  would 
not  entrust  any  money  to  an  institution  that  has 
been  so  grossly  mismanaged  as  has  the  Oarnegie 
Foundation.  Neither  would  I  favor  an  institu- 
tion managed  by  university  professors,  as  I  do 
not  regard  that  as  their  proper  business.  I  do 
not  greatly  favor  any  pension  scheme,  as  I  think 
that  university  professors  should  be  paid  salaries 
that  would  enable  them  to  take  care  of  them- 
selves. What  I  think  the  foundation  should  do  is 
to  apply  the  income  from  its  funds  to  the  pay- 
ment of  disability  pensions  in  all  the  colleges  of 
the  country,  making  these  payments  as  far  as  the 
money  will  go  in  the  order  in  which  the  cases  are 
deserving  and  critical.  This  is  what  it  should 
have  done  in  the  first  place. 


82  CABNEGIE 

After  the  incapacity  and  self-sufficiency  of  the 
Carnegie  Foundation  has  been  demonstrated  so 
completely,  I  feel  little  disposed  to  favor  any 
plan  whieh  postulates  that  they  shall  have  a  share 
in  the  management.  Should  their  attitude 
change  so  that  they  become  willing  to  cooperate 
instead  of  assuming  to  direct  I  should  then  have 
less  objection  to  their  sharing  in  the  administra- 
tion of  any  plan  that  might  be  adopted ;  but  now 
that  we  have  the  American  Association  of  Uni- 
versity Professors,  I  should  look  to  them  for  the 
last  word  in  all  matters  affecting  the  interests  of 
the  teaching  profession  and  not  to  a  self -consti- 
tuted and  self  ^perpetuating  body. 

I  AM  one  of  those  whom  you  refer  to  as  having 
accepted  positions  on  the  expectations  of  ithe  pen- 
sions.    In  1916  I  resigned  a  professorship  at 

: ,  at  $3,000,  and  accepted  one  at , 

at  the  same  figure ;  and  one  of  the  chief  reasons 
for  doing  so  was  that  tit  was  an  '^accepted''  in- 
stitution. Having  been  in  * 'accepted"  institu- 
tions for  nearly  two  years,  I  learned  that  my  *  *  ex- 
pectations" were  precisely  nothing.  The  ex- 
.perience  was  not  calculated  to  strengthen  my 
confidence  in  the  foundation.  It  now  appears 
that  I  am  to  be  compelled'  to  enter  a  plan  of  in- 
surance which  has  never  been  submititedj  to  me 
and  the  terms  of  which  I  do  not  know,  and  that 
the  administration  of  the  funds  I  pay  over  is  to 
remain  in  the  hand^  of  the  same  foundation.    But 


PENSIONS  83 

it  is  well  known  thiat  professors  like  to  have  their 
affairs  managed  for  them. 

The  Carnegie  Foundation  has  been  a  great 
disappointment  in  that  it  can  not  do  what  it 
promised  to  do.  The  ma;in  thing  in  my  opinion 
is  to  get  all  colleges  and  universities  to  double 
their  present  scale  of  salaries,  because  the  present 
scale  does  not  attract  the  able  young  men.  I  do 
not  think  college  professors  are  much  interested 
in  annuities — but  more  interested  in  making  pro- 
vision for  their  children — as  the  normal  success- 
ful man  ought  to  be. 

My  present  feeling  is  one  of  lack  of  confidence 
in  the  scheme  as  outlined  by  the  foundation ;  and 
I  strongly  object  to  any  form  of  supervision  and 
compulsion  which  gives  the  university  financial 
authorities  control  over  the  expenditure  of  sal- 
aries. Were  I  a  young  teacher  and  eligible  to 
the  benefits  and  obligations  of  the  proposed 
scheme,  I  should  greatly  prefer  insurance  in  one 
of  the  established  business  concerns  dealing  ex- 
clusively with  such  matters  and  under  the  con- 
trol of  financiers  without  academic  relaJtions. 

I  FEEL  that  the  Carnegie  Found!ation  has  been 
a  failure.  What  is  the  record?  First  the  retiring 
allowance  for  twenty-five  years*  service  is  with- 
drawn even  from  those  within  two  or  three  years 
of  the  time,  who  certainly  had  the  legal  and  moral 
right  to  count  on  it.  Next  the  age  limit  is  raised 
to  seventy  years  from  sixty-five  and  deduction 


84  CABNEGIE 

made  in  case  of  retirement  before  that  age. 
Under  present  conditions  I  do  not  believe  many 
professors  will  live  to  reach  seventy.  For  my 
own  part,  I  could  not  trust  for  the  future  to  any 
institution  as  unstable  as  the  Carnegie  Foun- 
dation. 

Certainly  I  agree  with  you  that  the  previous 
conduct  of  the  foundation  has  not  been  such  as 
to  inspire  respect  or  confidence  on  the  part  of 
member®  of  tihe  profession,  and  personally  I 
should  prefer  to  entrust  my  interests  to  the  cor- 
poration of  the  university  which  I  serve — even 
though  it  has  thus  far  shown  no  great  interest  in 
the  problems  under  consideration — ^rather  than 
to  any  body  of  men  willing  to  be  further  repre- 
sented by  President  Pritchett. 

As  you  have  pointed  out  professors  should 
capitalize  the  reduced  risk  to  which  they  are  en- 
titled. Their  superior  heredity  and  habits  should 
be  taken  advantage  of  as  readily  as  their  ideas. 
If  present  laws  will  not  permit  this,  the  facts 
should  be  organized  and  presented  to  legislators 
and  the  laws  changed.  These  pension  organiza- 
tions should  be  completely  independent  of  the 
universities,  national  in  scope,  and  non-compul- 
sory. No  plan  should  be  adopted  which  will 
interfere  with  the  progress  of  democratizing  our 
universities,  or  interfere  with  a  sane  develop- 
ment of  a  governmental  insurance  or  pension  sys- 
tem. 


PENSIONS  85 

I  AM  absolutely  opposed  to  any  compulsory 
class  insurance.  The  mere  need  of  compulsion 
implies  either  serious  defects  in  the  scheme  itself, 
or  the  assumption  of  obstinate  stupidity  as  a 
characteristic  of  the  class  concerned.  We  in  our 
profession  are  unbearably  familiar  with  the  latter 
assumption,  which  has  determined  the  policy  of 
appointment,  promotion  and  dismissal  so  con- 
sistently that  a  very  general  system  of  misselec- 
tion,  now  firmly  established,  has  produced  a  type 
closely  corresponding  to  that  assumption.  Should 
we  now  take  one  more  step  in  making  this  as- 
sumption our  own  ?  I  am  opposed  to  any  board 
of  control  endowed  with  a  shadow  of  a  title  to  an 
eleemosynary  function.  Any  ruling  board 
should  be  stripped  of  any  power  of  prerogative, 
discretion,  authority  and  direction,  derived, 
however  remotely,  from  any  eleemosynary  hy- 
pothesis. A  professional  insurance  association 
which  does  not  offer  greater  security,  greater  -pe- 
cuniary  advantages,  and  greater  active  partici- 
pation and  control  to  its  members  than  an  ordi- 
nary commercial  insurance  company,  and  tries 
to  combine  compulsion  with  autocratic  self-suffi- 
ciency, is  really  too  funny  for  serious  considera- 
tion. 

Any  scheme  of  professorial  insurance,  if  com- 
pulsory and  not  controlled  by  the  policyholders, 
will  surely  become  what  the  Carnegie  Foundation 
has  already  proved  to  be — a  means  of  keeping 


86  CABNEGIE 

down  salaries  and  grinding  tlie  faces  of  the  poor. 
The  solution  is  ^mple.  Let  professors  be  paid 
decent  salaries  and  let  them  provide  for  the  fu- 
ture on  their  own  responsibility,  or  else  let  them 
be  paid  full  salaries  during  the  term  of  their 
lives.  The  great  desideratum  at  present  is  better 
salaries,  so  that  we  and  our  families  may  live 
decently  and  that  we  may  do  our  work  effectively. 
**The  Lord  helps  those  who  help  themselves.'' 
Let  the  American  Assooiation  of  University  Pro- 
fessors start  an  aggressive  campaign  for  financial 
betterment  and  back  it  up  hy  concertedly  and 
resolutely  opposing  an  expansion  in  curricula 
and  staff,  and  by  discouraging  men  from  enter- 
ing the  profession,  until  the  end  is  achieved. 
The  commercial  press  and  some  university  presi- 
den'ts  have  sneeringly  dubbed  us  **The  Pro- 
fessors '  Union. ' '  Let  us  accept  the  challenge  im- 
plied and  become  a  real  fighting  union. 

Of  the  three  plans,  I  feel  especially  well  dis- 
posed toward  the  one  which  advocates  dealing 
with  the  old  established  insurance  companies. 
.  .  .  However,  a  company  formed  of  college  and 
university  professors  would  be  preferable  to  any 
scheme  outlined  by  the  present  Carnegie  man- 
agement. I  reflected  not  a  little  upon  the  career 
of  this  particular  board,  before,  indeed,  I  read 
anything  published  by  you,  and  I  gradually 
came  to  feel  myself  in  opposition  to  it.  There 
was   nothing  very   tangible,   but   I   distrusted 


PENSIONS  87 

it.  Frankly,  I  think  that  the  head  of  the  iboard 
is  incompetent,  and  inconnpetency  is  almost  crim- 
inal in  such  a  matter.  I  especially  object  to  any 
form  of  compulsory  insurance  for  college  pro- 
fessors. I  do  not  think  that  we  should  be  classed 
along  with  incompetents  and  the  feeble-minded. 
Given  a  fair  salary,  men  who  should  be  engaged 
in  coUege  work  will  look  out  for  tihemselves. 

It  has  long  been  apparent  that  the  *  *  Carnegie 
board  of  college  presidents, ' '  as  a  speaker  uncon- 
sciously, but  truthfully,  dubbed  that  group,  has 
signally  failed  in  the  task  assigned  them.  Per- 
haps the  teaching  profession  deserved  to  see  fail- 
ure come  ux)on  a  plan  which  treated  them  at  once 
as  children  unable  to  care  for  their  own  interests 
and  as  anxious  or  at  least  willing  to  be  cared  for. 
The  new  Oarnegde  board  plan,  so  far  as  I  know 
it,  has  Ijhe  same  faults  as  the  old  ones — ^paternal- 
ism,  essential  irresponsibility  and  the  evasion  of 
existing  obligations.  If  it  could  be  brought 
about — the  securing  of  a  favored  rate  from  an 
old  line  company  based  on  the  fact  that  teachers 
are  a  favored  risk — it  would  seem  to  me  the  best 
way  out. 

A  SERIOUS  fault  that  is  obvious  to  the  teacher  is 
that  it  fails  to  give  one  of  the  essential  require- 
ments of  insurance,  viz.,  reasonable  assurance 
that  the  promises  will  be  kept.  It  is  interesting 
to  read  the  explanations  of  the  Carnegie  Foun- 
dation for  the  changes  in  plans,  but  unfortu- 


88  CABNEGIE 

nately  the  beneficiary  (?)  is  vitally  concerned, 
and  the  Carnegie  Foundation  as  an  insurance 
company  is  losing  the  confidence  of  teachers. 

As  chairman  of  our  faculty  committee  on  re- 
tirement allowances  I  have  carried  out  an  inde- 
pendent investigation  of  the  *' benefits'*  offered 
by  the  contracts  availaible  through  the  Teachers 
Insurance  and  Annuity  Association  and  my  con- 
clusions fully  corroborate  those  arrived  at  by 
yourself  and  others.  .  .  .  Nothing  should  be  left 
undone  ait  this  time  to  bring  college  teachers  to 
full  realization  that  this  new  enterprise  of  the 
foundation  is  not  worthy- of  their  cooperation 
and  confidence. 

I  AM  more  pleased  and  thankful  every  year  as 
I  view  the  changing  policies  of  the  foundation 
that  it  has!  been  my  lot  to  work  in  institutions 
not  undter  the  Carnegie  pension  system.  Unques- 
tionably my  ** misfortune"  has'  been  good:  for- 
tune. I  have  never  for  one  moment  allowed  my- 
self to  look  forward  to  the  help  of  a  single  dollar 
of  Carnegie  pension  money,  and  have  therefore 
laid  my  own  plans  from  the  beginning  to  take 
care  of  my  own  finances.  And  that  has  been  the 
more  possible  because  my  salary  has  been  better 
than  it  would  have  been  in  the  benevolent  insti- 
tutions under  the  foundation. 

If  teaching  is  to  be  considered  a  ''man's  size" 
job  I  see  no  reason  why  the  teacher  should  not 
receive  * 'man's  size"  pay  and  therefore  be  in  a 


PENSIONS  89 

position  to  make  the  same  insurance  plans  as  any 
other  citizen.  If  the  teacher  is  to  continue  as  an 
underpaid  employee  to  such  an  extent  that  he 
will  have  to  depend  on  semi-charitable  insurance, 
it  seems  to  me  that  the  funds  ^ould  be  handled 
by  a  reputable  insurance  company  and  by  pro- 
fessional instead  of  amateur  managers. 

It  has  seemed  to  me  that  the  management  of 
the  foundation  has  been  attended  with  grave  lack 
of  foresight.  I  can  not  help  but  feel  that  very 
few  institutions  would  have  retained  the  same 
management  as  long  as  this  institution,  when  so 
many  errors  of  judgment  seem  to  have  been 
committed.  I  should  certainly  oppose  any  plan 
for  insurance  and  annuities  which  involved  com- 
pulsion, and  feeling  as  I  do  about  the  institution 
in  question,  I  should  be  very  unwilling  to  enter 
into  any  scheme  which  was  to  be  administered  by 
those  who  have  administered  its  affairs. 

My  opinion  is  that  the  value  of  the  Oarnegie 
Foundation,  after  all  the  changes  through  which 
it  has  passed,  has  become  insignificant  for  college 
teachers.  It  is  *  *  poor-relief.  *  *  Teachers  ought  to 
establish  their  own  insurance  company,  con- 
trolled by  the  American  Association  of  Univer- 
sity Professors  and  owned  by  this  body,  but  rein- 
sured in  some  already  existing  company. 

I  THINK  that  college  teachers  should  act  for 
themselves  in  the  matter  of  insurance  and  pen- 
sions.   Neither  boards  of  trustees  nor  charitable 


90  CABNEGIE 

funds  will  do  the  business,  nor  is  there  any  rea- 
son why  teachers  should  sit  by  as  if  they  were  in- 
mates of  an  orphan  asylum  or  an  old  ladies  home, 
and  wait  for  some  one  else  to  do  it.  I  believe 
that  the  matter  is  a  proper  function  for  the 
Association  of  University  Professors. 

I  HAVE  personally  spent  very  little  time  over 
C-P-B  doings  because  I  never  expected  to  do  any 
business  with  the  Co.  I  believe  that  if  a  professor 
is  to  receive  so  low  a  salary  that  he  can  not  lay 
up  anything  for  his  old  age  he  should  in  justice 
receive  the  balance  of  his  salary  in  the  form  of  a 
pension  later  on.  But  I  would  prefer  to  receive 
an  adequate  salary  and  lay  up  my  own  pension 
and  maintain  my  self-respect  and  independence. 
If  the  pension  is  given  the  university  should 
somehow  provide  it. 

Let  us  insist  upon  being  men  among  men, 
women  among  women,  citizens  among  citizens, 
seeking  adequate  compensation  for  our  services, 
and  demanding  the  right  enjoyed  by  other  peo- 
ple of  spending  our  own  money  and  making  our 
own  provisions  for  the  rainy  day  or  for  old  age. 
Any  pension  scheme  for  teachers,  it  seems  to  me, 
is  built  upon  an  assumption  that  they  are  in- 
capable of  managing  their  own  affairs  and  need 
guardians,  and  any  such  scheme  has  a  strong 
tendency  to  keep  down  wages.  But,  of  all  the 
schemes  suggested,  the  one  under  discussion 
seems  to  me  the  least  desirable. 


PENSIONS  91 

The  Carnegie  Pound'ation  no  longer  merits  our 
consideration.  We  are  through  with  it  unless  it 
has  a  house-cleaning.  No  self-respecting  man 
will  tolerate  compulsory  insurance  from  the  ad- 
ministration. A  mutual  company  of  men  of  pro- 
fessional rank,  taken  over  by  some  **old  line*' 
might  be  desimble.  At  any  rate  let  us  study  the 
problem  further  and  fearlessly. 

The  ability  of  teachers  to  stand  squarely  on 
their  feet,  mentally  and  morally,  is  none  too  great 
as  things  are;  a  pension  system  controlled  by 
persons  or  forces  outside  of  the  teaching  ranks 
will,  it  seems  to  me,  work  against  the  best  inter- 
ests of  the  teaching  profession.  Adequate  main- 
tenance of  the  teacher  must  be  secured  in  some 
other  way. 

I  FEEL  very  strongly  upon  this  matter  and  sub- 
stantially agree  with  you.  I  am  thoroughly  op- 
posed to  the  scheme  which  so  many  of  our  uni- 
versities have  adopted  of  a  retiring  age,  and  the 
Carnegie  pension  scheme  looks  to  me  like  an  ef- 
fort to  irrevocably  fasten  this  system  on  the  uni- 
versities. 

The  Carnegie  Foundation  is  not  equal  to  its 
self-imposed  task  of  judging  and  standardizing 
universities,  and  the  university  that  submits 
itself  to  suoh  control  is  in  great  danger  of  serious 
harm.  The  individual  professor  should  be  wiser 
than  to  place  any  reliance  on  such  a  scheme  for 
his  financial  support. 


92  CABNEGIE 

As  a  self-respecting  citizen  as  well  as  a  college 
professor  I  have  always  felt  a  repugnance 
towards  an  organization  which  has  presumed  to 
dictate  the  educational  policies  of  this  country 
and  which  intimates  that  college  professors  as  a 
class  are  not  to  he  trusted  to  handle  their  own 
financial  affairs. 

I  REGRET  and  deplore  lihe  existence  of  any  in- 
stitution having  the  objects,  apparent  or  con- 
cealed, and  the  consequences,  whether  intended 
or  merely  inevitable,  of  the  Carnegie  Founda- 
tion. The  only  hope  of  an  honorable  future  for 
the  profession  of  teaching  in  our  colleges  and 
universities  lies  in  the  increases  of  salaries  to 
magnitudes  compsirable  with  the  incomes  of  suc- 
cessful men  in  the  professions  of  law  and  medi- 
cine, and  in  complete  independence  in  regard  to 
provision  for  old  age  and  death. 

We  are  all  grateful  to  you  for  fighting  the 
octopus. 

I  FAVOR  the  divorce  of  the  pension  and  insur- 
ance system  from  an  agency  which  might  prosti- 
tute the  independence  of  the  college  professor. 

I  WANT  to  thank  you  for  your  splendid  efforts. 
We  need  a  higher  standard  of  men  in  our  profes- 
sion, and  if  we  do  not  find  some  means  of  attract- 
ing them  it  will  continue  to  fall  in  dignity  and 
in  the  estimation  of  the  people. 

I  WANT  to  express  my  appreciation  of  your  in- 


PENSIONS  93 

cisive  treatment  of  the  Carnegie  Foundation's 
dust-in-the-eyes  and  hemp-about-the-neck  insur- 
ance i)olicies  and  other  policies.  Personally  I 
will  have  none  of  them. 

No  compulsion;  an  organized  plan  und«r 
supervision  of  the  insured  seems  best;  we  must 
beware  of  control  by  the  capitalist  of  the  teach- 
ing profession;  academic  freedom  first,  financial 
protection  second. 

Under  Pritchett's  leadership  the  Carnegie 
Foundation  has  failed.  It  was  organized  pre- 
sumably to  improve  teaching,  but  has  resulted  in 
decreasing  the  influence  of  the  teacher.  It's  up 
to  the  foundation  to  find  a  new  manager  and  also 
the  funds  to  fulfil  its  promises. 

I  HAVE  no  confidence  in  the  men  who  have  been 
in  charge  of  the  foundation.  I  should  have  the 
strongest  objection  to  any  scheme  for  compul- 
sory insurance,  and  I  do  not  believe  such  a 
scheme  would  be  adopted  by  our  better  institu- 
tions or  tolerated  by  the  profession. 

It  seems  to  me  that  the  president  of  the  Car- 
negie Foundation  has  demonstrated  his  unfitness 
for  leadership  as  regards  academic  insurance  so 
completely  that  the  first  question  should  be  the 
finding  of  a  suitable  president  in  case  insurance 
is  to  be  considered  in  connection  with  the  Car- 
negie Foundation. 

College   professors  should  demand  a  salary 

7 


94  CABNEGIE 

gufficient  to  provide  for  insurance  in  the  estab- 
lished eompanies.  I  resent  being  in  the  charity- 
class.  I  have  no  eonfidence  whatever  in  the  Car- 
negie Foundation  as  constituted'  at  present  and 
would  not  entrust  a  eent  of  my  earnings  to  its 
management. 

The  administration  of  the  Carnegie  Founda- 
tion up  to  date,  though  the  present  scheme  is  not 
escaped  out  of  a  m'adhouse  like  the  first,  has  been 
so  unintelligent  and  so  incompetent  that  one  is 
quite  sure  of  its  collegiate  character.  .  .  .  The 
real  marvel  is  that  sometimes  those  supermen. 
Presidents  and  Deans,  have  risen  out  of  the 
ranks  of  mere  professors.  Immediately  the  lay- 
ing on  of  hands  by  a  board  of  trustees  converts 
them  into  men  of  affairs,  men  of  the  world. 

Of  course  I  most  cordially  disapprove  of  the 
foundation's  neW  scheme.  I  regard  a  compul- 
sory insurance  plan  as  a  device  for  depriving 
members  of  the  academic  profession  of  a  part  of 
their  salaries,  and  nothing  more.  Under  such 
management  as  the  Carnegie  Foundation  has  ex- 
hibited in  the  past,  I  think  that  the  previous 
sentence  states  the  whole  story. 

Pritchett  and  Butler  are  so  completely  dis- 
credited in  the  eyes  of  the  teaching  profession, 
so  far  as  my  information  goes,  that  no  one  can 
now  put  the  slightest  faith  in  any  of  their  propo- 
sitions. We  all  owe  you  a  great  debt  of  gratitude 
for  your  vigorous  leadership  in  exposing  the  true 


PENSIONS  96 

nature  of  the  Carnegie  Foundation's  manage- 
ment.   Success  to  your  arm ! 

From  the  first  it  has  seemed  to  me  that  the  Car- 
negie Foundation — at  least  under  President 
Pritchett — ^was  a  machine  for  controlling  and 
enslaving  academic  action.  I  have  marked  some 
of  its  results  in ,  as  elsewhere,  and  I  de- 
plore the  results  on  the  policy  of  institutions  of 
learning. 

I  HAVE  the  greatest  admiration  for  your  self- 
sacrificing  and  untiring  efforts  in  behalf  of  the 
intimidated  and  nerveless  academic  profession 
of  this  country. 

I  AM  opposed  to  all  schemes  further  to  humble 
and  depress  the  university  professor.  I  would 
be  interested  in  any  system  that  would  make 
them  more  powerful  and  effective  in  their  work. 
All  this  nonsense  about  pensions  is  calculated  to 
preserve  the  present  weaknesses  instead  of  pre- 
venting them.  I  want  none  of  Pritchett 's  benev- 
olence. 

All  these  private  ** foundations"  and  ** endow- 
ments'* are  abhorrent  to  me  in  any  form. 
Whether  intentionally  or  not,  their  effect  is  to 
shackle  the  freedom  of  speech  and  action  of  those 
who  should  be  most  free — ^the  teachers  of  the  na- 
tion. Moreover,  the  present  discussion  interests 
me  little,  except  as  it  shows  the  protest  of  aca- 
demic slaves.    It  is  too  narrow.    Old  age  pen- 


96  CABNEGIE 

sions  for  teachers  interest  me  only  as  a  part  of 
the  general  subject  of  old  age  pensions  for  e very- 
man  who  has  done  his  share  of  the  world's  work. 

The  more  I  ponder  on  the  matter  of  teacher's 
insurance  the  more  I  am  convinced  that  in  order 
to  be  a  real  good  it  must  be  absolutely  divorced 
from  the  Carnegie  Foundation.  Further,  it  must 
be  a  mutual  affair,  managed  by  the  teachers  and 
founded  on  sound  insurance  principles.  As  I 
see  it,  the  Carnegie  Foundation  is  only  helping 
to  establish  more  firmly  the  academic  tyranny. 
If  democracy  is  to  have  any  chance  to  justify 
itself,  the  next  great  autocracy  to  be  crumbled 
is  the  one  manifest  from  the  top  to  the  bottom  of 
our  extensive  educational  system. 

Every  one  who  has  followed  the  various  and 
inexcusaWe  changes  in  the  policy  of  the  Carnegie 
Foundation  must  have  lost  all  confidence  in  the 
management.  The  attitude  of  the  president  of 
the  foundation  toward  college  professors  as  shown 
in  his  writings,  the  last  of  which  appeared  in  the 
December  Atlantic  Monthly,  reveals  his  incapac- 
ity to  d^al  fairly  with  them.  He  evidently  re- 
gards professors  as  neither  intelligent  nor  hon- 
orable. One  who  takes  this  view  is  incapacitated 
for  fair  dealing.  His  attitude  is,  of  course,  the 
psychological  effect  of  autocratic  power.  The 
president  of  the  foundation  has  already  demon- 
strated his  intellectual  unfitness  for  the  position 
which  he  holds. 


PENSIONS  97 

Every  teacher  in  Ameriea  ought  to  feel  in- 
d-ebted  to  you  for  the  fight  you  are  making  for 
educational  democracy.  ...  As  for  the  Carnegie 
Foundation,  I  think  it  should  save  every  i)enny 
toward  meeting  its  legal  obligations  instead  of 
wasting  money  on  printer's  ink  in  attemxxts  to 
** explain.'*  ...  In  the  end  salaries  and  pensions 
are  less  important  than  tenure,  for  secure  tenure 
means  academic  freedom,  and  academic  freedom 
is  as  essential  to  political  liberty  as  an  independ- 
ent judiciary  or  a  free  press  (if  I  may  speak  of 
things  hypothetical  as  if  they  existed).  And  we 
could  have  secure  tenure  and  academic  freedom 
to-day,  in  spite  of  oligarchic  control,  if  the  pro- 
fession as  a  body  would  demand  them  and  back 
up  the  demand  by  concerted  action. 

I  SEE  no  advantages  and  the  greatest  elements 
of  danger  to  our  already  supine  teaching  stock 
in  the  whole  Carnegie  program  as  now  outlined, 
and  vote,  if  only  an  alternative  is  given,  for  the 
proposition  that  some  different  plan  be  consid- 
ered. If  given  free  choice  I  prefer  to  have  noth- 
ing to  do  with  the  Carnegie  pension  fund.  .  .  . 
Needless  to  add  I  hope  that  you  will  keep  up  the 
fight  and  take  comfort  in  the  fact  that  the  ma- 
jority, though  weak  as  milk,  is  with  you. 

Is  there  on  this  earth  another  such  body  of  in- 
effectual serfs  as  the  American  college  professors, 
underpaid,  overworked,  afraid  of  their  jobs,  de- 
spised by  the  students,  general  public,  press, 


98  CABNEGIE 

everybody,  bulldozed  by  petty  tyrants  who  get 
control  through  *'exe<jutive  ability''  which  gen- 
erally means  wire-pulling  and  kowtowing  to  all 
that  ruins  academic  life  ?  ...  As  for  the  pension 
business  it  ha^s  been  a  monumental  example  of 
stupidity,  craft  and  shabby  shuffling.  My  inner 
conviction  is  that  we  should  no  more  aim  at  pen- 
sions than  lawyers  and  doctors;  that  we  should 
aim  at  just  salaries  and  manly  independence,  if 
not  for  our  own  sakes  at  least  that  our  sons  may 
be  taught  by  real  men  and  not  by  old  women  and 
prospective  paupers  and  pensioners.  I  have  had 
thirty-five  years'  happy  and  successful  (in  a 
small  way)  experience  and  these  be  my  inner- 
most convictions.  I  have  always  regarded  you  as 
holding  the  only  right  views  and  as  having  the 
courage  of  your  convictions.  You  are  a  fighting 
general  trying  rtx)  lead  a  charge  of  sheep. 

I  DOUBT  much  whether  connection  with  the 
Carnegie  Foundation  is  worth  what  it  costs — at 
least  under  the  management  of  Mr.  Pritchett. 
It  began  by  using  its  resources  to  make  itself  a 
dictator  of  educational  policy,  and  from  the  first 
it  has  been  more  interested  in  its  own  importance 
than  in  the  welfare  of  the  college  teachers. 
"When  it  became  necessary  to  reveal  that  the 
foundation  had  been  brought  to  the  verge  of 
ruin  by  astounding  incompetence,  Mr.  Pritchett 
sought  to  cover  the  fact  by  telling  us  that  we  were 
a  lot  of  lazy  beggars.    And  he  is  even  now  so 


PENSIONS  99 

lacking  in  modesty  that,  in  this  month *s  Atlantic, 
he  writes  as  an  expert  on  pensions  and  offers 
another  homily  on  the  moral  needs  of  college  pro- 
fessors. I  should  say  that  any  new  plan  ought 
to  be  preceded  by  the  retirement  of  the  present 
management ;  and  that,  if  we  may  not  insist  upon 
this,  it  proves  only  once  more  that  the  calling  of 
college  professors  in  the  United  States  is  an  ig- 
noble profession. 

Every  activity  of  the  Carnegie  Foundation,  I 
believe,  has  been  misdirected  or  reprehensible. 
No  compulsory  scheme  of  insurance  could  be  en- 
tered into  with  the  Carnegie  Foundation  by  any 
self-respecting  educational  institution,  and  no 
self-respecting  teacher  would  countenance  such 
a  scheme.  Any  scheme  which  tends  to  give  the 
Carnegie  Foundation,  directly  or  indirectly,  con- 
trol of,  or  influence  over,  our  educational  insti- 
tutions, methods  and  aims  is  in  and  per  se  evil 
and  not  to  be  tolerated.  Carthago  ddenda  est; 
or,  at  least,  Hannibal  must  be  conquered,  and 
Carthage  ''made  safe  for  democracy.** 


THE  CARNEGIE  FOUNDATION  FOR  THE 
ADVANCEMENT  OF  TEACHING^ 

The  annual  reports  of  President  Eliot  to  the 
corporation  of  Harvard  University  have  in  cer- 
tain respects  been  the  most  interesting  educa- 
tional documents  of  past  years;  their  place  will 
now  be  taken  by  the  reports  of  President  Prit- 
chett  of  the  Carnegie  Foundation.  In  these 
reports  and  in  the  intervening  bulletins,  there 
are  not  only  given  lucid  and  complete  accounts 
of  the  activities  of  an  institution  of  vast  impor- 
tance for  higher  education,  but'  also  careful 
studies  of  the  educational  system  of  the  country. 
In  this  respect  the  foundation  sets  an  example 
to  the  General  Education  Board,  which  keeps 
for  its  private  use  the  information  that  it  col- 
lects, and  does  not  even  publish  the  financial 
statements  that  should  be  required  by  law  from 
every  corporation,  and  first  of  all  from  those  ex- 
empted from  taxation. 

President  Pritchett's  third  annual  report, 
which  covers  the  year  ending  September  30, 
1908,  shows  that  the  new  grants  made  during  the 
year  amounted  to  $113,765.  The  grants  in  force 
amounted  to  $303,505,  an  increase  of  $101,360 
over  the  preceding  year.  Should  this  increase 
continue  for  two  further  years,  the  income  of 
the  foundation  would  be  exhausted.    The  retir- 

1  Printed  in  Science,  April  2,  1909. 
100 


PENSIONS.  ,  -..'.  ;•,  :•  001 
.  \ .,'''  \'  '•'•*  *•'*•  *  **  •  '*' ' 
ing  allowances  in  force  were:  On  basis  of  age, 
86 ;  on  basis  of  length  of  service,  81 ;  for  disabil- 
ity, 15 ;  to  widows  of  professors,  29.  The  aver- 
age age  of  those  retired  for  length  of  service  is 
65.7  years,  so  that  it  would  appear  that  more  than 
half  of  them  are  entitled  to  retirement  for  age. 
The  average  value  of  the  retiring  allowances  is 
$1,532.58.  The  institutions  drawing  the  largest 
sums  are:  Yale,  $25,195;  Cornell,  $16,570;  Har- 
vard, $16,305;  Tulane,  $14,365;  Columbia, 
$14,055;  Stevens,  $11,075. 

Valuable  data  are  given  in  the  report  in  re- 
gard to  institutions  on  the  accepted  list  and  the 
state  universities,  together  with  a  discussion  of 
political  interference  in  tax-supported  institu- 
tions with  special  reference  to  the  University  of 
Oklahoma.  Other  topics  treated  are:  the  ex- 
change of  teachers  between  Prussia  and  the 
United  States;  uniformity  in  financial  reports; 
teachers'  insurance;  college  requirements  for 
admission;  special  students;  amount  of  instruc- 
tion given  by  teachers;  professional  education; 
denominational  education. 

The  foundation  adopted  during  the  year  two 
new  policies  of  great  importance — one  the  ad- 
mission of  tax-supported  institutions  for  the 
cost  of  which  Mr.  Carnegie  has  undertaken  to 
give  $5,000,000,  the  other  the  provision  that  a 
widow  shall  receive  half  the  pension  to  which 
her  husband  would  have  been  entitled. 

There  is  no  valid  reason  why  the  states  should 


102     ■'^"Z-^-^^:-      CABNEGIE 

not  accept  a  gift  from  Mr.  Carnegie  for  their 
universities.  In  so  far  as  the  money  came  orig- 
inally from  the  people,  and  especially  from  the 
agricultural  regions  of  the  central  and  western 
states,  through  the  workings  of  the  tariff,  this 
was  imposed  by  the  representatives  of  the  states, 
and  the  best  use  of  the  money  is  to  return  it  to 
those  from  whom  it  was  taken.  Nor  is  the  fact 
that  the  fund  is  in  the  form  of  bonds  of  the 
United  States  Steel  Corporation  significant.  All 
our  universities  hold  bonds  of  railway  and  other 
corporations  whose  activities  have  not  always 
been  beyond  reproach. 

The  real  questions  are  whether  a  centralized 
pension  fund  is  for  the  advantage  of  our  univer- 
sities, and,  if  so,  whether  a  fund  can  be  provided 
sufficiently  large  for  the  purpose.  The  writer 
dissents  from  most  of  his  colleagues  in  doubting 
the  desirability  of  a  uniform  and  centrally  ad- 
ministered pension  fund.  I  have  always  been 
prejudiced  against  annuities  and  those  who  buy 
annuities ;  it  is  distasteful  to  me  to  be  thrust  by 
force  of  icarcumstance  into  this  class.  The  presi- 
dent of  one  of  our  leading  universities  has  stated 
in  a  report  to  the  trustees  that  the  annual  value 
of  the  pension  to  a  professor  in  middle  life  is 
$1,200.  I  should  prefer  to  have  this  increase  to 
my  salary  now  when  I  have  children  to  educate ; 
or,  if  it  could  be  saved,  to  have  it  as  capital  to 
be  used  for  such  purposes  as  may  be  desirable 
and  to  be  bequeathed  to  my  family.    The  with- 


PENSIONS  103 

holding  of  part  of  a  professor's  salary  to  be  paid 
ultimately  after  good  behavior  in  the  form  of 
an  annuity  will  tend  to  increase  the  autocracy 
of  univeristy  administration  and  to  limit  not 
only  the  freedom  of  action  but  also  the  freedom 
of  speech  of  the  professor.  It  will  also  limit  the 
freedom  of  action  of  the  administration,  for  a 
professor  can  not  be  dropped  honorably  when 
part  of  his  salary  has  been  reserved  for  a  pen- 
sion. It  seems  from  the  decision  of  the  courts 
in  the  case  of  Professor  Capps  against  the  Uni- 
versity of  Chicago  that  this  can  not  be  done 
legally,  and  there  will  probably  arise  complica- 
tions which  have  not  been  fully  foreseen. 

It  is  not  intended  to  imply  that  the  office  of 
the  professor  should  be  subject  to  the  commer- 
cial law  of  supply  and  demand.  On  the  con- 
trary, he  should  have  life  tenure,  only  forfeited 
by  the  violation  on  his  part  of  the  conditions 
implied  in  accepting  the  office.  It  would  be  in- 
tolerable if  a  professor  could  be  dismissed  sim- 
ply because  the  president  thinks  that  he  might 
obtain  a  more  acceptable  man  in  his  place  for 
the  same  or  a  smaller  salary.  The  professor  is 
appointed  at  the  average  age  of  nearly  forty 
years  and  is  likely  to  remain  what  he  then  is ;  if 
an  unwise  appointment  has  been  made,  the  in- 
stitution should  accept  the  responsibility. 

Permanent  tenure  of  office  doubtless  implies  a 
continuation  of  salary  or  a  pension  in  case  the 
professor  can  no  longer  serve  to  advantage ;  and 


104  CABNEGIE 

this  leaves  the  difficulty  resulting  from  paying  a 
professor  less  than  he  is  worth  in  middle  life  in 
order  that  he  may  receive  more  than  he  is  worth 
in  old  age.  Obviously  we  must  face  this  situa- 
tion; but  it  is  emphasized  and  made  worse  by 
the  establishment  of  a  uniform  and  centralized 
system  of  pensions.  It  can  be  most  conveniently 
met  if  we  are  sufficiently  optimistic  to  assume 
that  on  the  average  the  services  of  professors 
over  sixty-five  years  of  age  are  worth  to  their 
institutions  and  to  the  community  the  salaries 
that  had  previously  been  paid.  A  professor  at 
this  age  may  become  a  less  efficient  teacher  in 
professional  and  required  courses,  though  this  is 
not  always  the  case.  It  is,  however,  by  no  means 
certain  that  he  is,  on  the  average,  a  less  desirable 
teacher  in  advanced  and  elective  courses ;  or  that 
his  scholarship,  experience,  judgment  and  poise 
are  not  of  the  utmost  advantage  to  the  univer- 
sity. A  man  of  this  age  may  not  have  new  ideas ; 
but  his  research  work  and  productive  scholar- 
ship are  likely  to  continue  and  to  be  of  greater 
value  to  the  world  than  the  salary  he  is  paid. 

The  teachers  who  have  had  the  greatest  influ- 
ence on  the  writer  are  Professor  March,  of  La- 
fayette College,  and  Professor  Wundt,  of  Leip- 
zig. Professor  March  ceased  to  teach  recently 
at  the  age  of  over  eighty  years  and  Professor 
Wundt  continues  to  lecture  regularly  at  the  age 
of  seventy-five  years.  It  would  have  been  a 
serious  loss  if  these  great  men  had  ceased  to 


PENSIONS  105 

teach  at  the  age  of  sixty  or  sixty-five.  If  I  were 
now  beginning  the  study  of  psychology,  I  should 
wish  to  spend  a  year  under  Professor  Wundt 
at  Leipzig  and  a  year  under  Professor  James  at 
Harvard.  I  should  be  able  to  work  under  Pro- 
fessor Wundt,  but  should  find  that  Professor 
James  had  been  retired  on  a  Carnegie  pension 
in  the  fullness  of  intellectual  vigor.  If  Mr. 
Angell  can  to  advantage  serve  as  president  of 
Michigan  to  the  age  of  eighty  and  Mr.  Eliot  can 
serve  as  president  of  Harvard  to  the  age  of  sev- 
enty-five and  still  retain  the  chairmanship  of 
the  trustees  of  the  Carnegie  Foundation,  we  have 
evidence  that  a  dead  line  can  not  be  drawn  at 
sixty-five. 

The  institutions  accepting  the  terms  of  the 
Carnegie  Foundation  for  pensions  on  the  basis 
of  age  must  make  retirement  on  a  pension  at 
sixty-five  mandatory,  or  else  they  must  make  it 
a  matter  of  arrangement  between  the  adminis- 
tration and  the  professor.  Either  alternative  is 
unfortunate.  If  the  retirement  is  mandatory, 
the  institution  will  lose  men  whom  it  can  not  af- 
ford to  lose,  and  professors  will  be  retired  who 
are  competent  and  anxious  to  continue  their 
work.  It  will  be  a  poor  reward  in  the  academic 
career  to  cut  men  off  from  the  service  of  their 
lives  and  pay  them  part  salary,  when  in  other 
professions  at  that  age  they  would  probably  have 
continued  to  be  leaders  and  to  have  had  an  in- 
come at  least  twice  as  large  as  twenty  years  be- 


106  CABNEGIE 

fore.  If  the  retirement  is  only  permissory  an 
institution  might  gain  temporarily  by  retiring 
its  less  efficient  men;  but  this  would  be  only  a 
mitigated  form  of  the  policy  of  dismissing  pro- 
fessors whenever  their  places  can  be  filled  at  less 
cost.  Every  institution  could  improve  for  a  time 
its  faculties  by  dismissing  twenty  per  cent,  of 
its  professors;  but  such  an  undertaking  would 
in  the  end  be  disastrous  to  the  institution  and 
to  higher  education.  If  only  incompetent  pro- 
fessors and  those  not  in  favor  with  the  admin- 
istration are  retired  at  sixty-five,  the  pension  will 
be  far  from  an  honor  and  by  no  means  a  worthy 
close  to  an  academic  career.  It  will  frighten 
able  men  from  it  at  the  outset,  and  tempt  them 
to  desert  it  when  they  can. 

It  may  give  a  sense  of  security  to  be  assured 
of  a  pension  in  old  age ;  but  when  the  time  comes 
the  reduced  salary  will  cause  difficulty  to  those 
not  having  independent  means.  There  will  be 
a  tendency  for  the  professor  to  engage  in  some 
form  of  money-making  and  to  begin  early  in  his 
career.  An  eminent  man  of  science  has  written 
to  me  that  since  he  had  been  retired  on  a  Car- 
negie pension  he  could  no  longer  contribute  to  a 
scientific  journal,  as  he  had  to  earn  a  living  for 
his  family  by  writing  fiction.  The  community 
and  the  world  are  largely  dependent  on  the  uni- 
versity professor  for  the  advancement  of  science 
and  scholarship  and  for  the  maintenance  of  the 
best  ideals,  and  those  great  services  are  not  paid 


PENSIONS  107 

for  directly.  They  can  only  be  assured  by  at- 
tracting the  best  men  to  university  chairs  and 
then  setting  them  free  to  do  their  work  with  no 
interference  and  no  fear  of  dismissal  even  on 
half  salary. 

In  my  opinion  the  Carnegie  Foundation  would 
have  been  most  wisely  administered  if  it  had 
agreed  to  give  to  every  institution  that  had 
adopted  or  would  adopt  a  half-salary  pension 
after  the  age  of  sixty  or  sixty-five  an  endowment 
sufficient  to  defray  the  remaining  half  of  the  sal- 
ary, so  that  the  professor  would  be  paid  his  reg- 
ular salary  for  life.  He  could  then  retire  from 
the  teaching  for  which  he  was  not  fit,  but  could 
continue  to  give  his  services  to  his  institution 
and  to  his  science.  Or  if  the  allowance  had  been 
paid  by  the  foundation  directly  to  the  professor 
without  regard  to  whether  or  not  he  continued 
his  teaching,  then  he  could  give  to  his  institution 
so  much  service  as  he  might  render  to  advantage 
and  in  turn  receive  so  much  salary  as  he  might 
earn. 

But  the  trustees  of  the  Carnegie  Foundation 
are  presidents,  not  professors,  and  the  money  is 
to  be  divided  in  the  main  so  as  to  relieve  the 
financial  straits  of  the  institutions,  not  to  im- 
prove the  status  of  the  professors.  The  pro- 
fessors in  those  institutions  which  already  had  a 
pension  system  do  not  gain  financially  as  far  as 
the  old-age  scheme  is  concerned  and  lose  in  cer- 
tain ways;  whereas  the  institution  gains  the 


108  CABNEGIE 

amount  it  had  contracted  to  pay  in  pensions. 
The  professor  as  well  as  the  president  is  pleased 
that  the  university  has  added  resources;  but 
they  do  not  differ  from  any  other  unrestricted 
endowment. 

The  conditions  are  different  in  the  case  of  in- 
stitutions which  did  not  have  a  pension  system. 
Here  too  it  is  chiefly  the  institution  which  gains, 
for  it  was  bound  in  honor  to  provide  for  its  dis- 
abled professors,  and  it  will  hereafter  pay 
smaller  or  less  increased  salaries  in  view  of  the 
pensions.^  But  the  presidents  and  professors 
have  an  assurance  that  they  did  not  have  and 
will  have  annuities  that  they  did  not  earn  or 
only  partly  earned.  The  advisability  of  having 
made  the  pensions  retroactive  in  this  way  is 
questionable.  Gifts  may  be  at  the  same  time  ac- 
ceptable and  demoralizing.  When  Tulane  Uni- 
versity raises  nominally  its  entrance  require- 
ments beyond  what  can  be  met  by  the  high 

2  It  is  not  admitted  by  the  officers  of  the  foundation 
that  pensions  will  tend  to  prevent  increase  of  salaries; 
but  this  appears  to  be  an  inevitable  result  of  economic 
law.  In  seeking  recruits  for  the  army  and  navy  the  gov- 
ernment states  that  the  small  wages  are  compensated  for 
by  the  pensions,  and  one  of  the  state  universities  has 
urged  that  if  the  legislature  does  not  accept  the  pensions 
from  the  foundation,  it  will  be  necessary  to  pay  higher 
salaries  in  order  to  retain  its  professors.  A  pension  sys- 
tem may  or  may  not  improve  educational  efficiency,  and 
it  may  or  may  not  improve  the  general  conditions  of  the 
academic  career;  it  will  not  improve  permanently  the 
financial  status  of  the  professor. 


PENSIONS  109 

schools  of  Louisiana  in  order  that  it  may  be  ac- 
cepted by  the  foundation,  we  are  not  surprised 
to  find  that  it  draws  annually  $14,365,  and  when 
the  Central  University  of  Kentucky  cuts  itself 
off  nominally  from  its  denominational  control  in 
order  that  it  may  be  accepted,  we  are  not  sur- 
prised to  find  that  three  of  its  eleven  professors 
are  immediately  placed  on  the  foundation. 

It  would,  I  believe,  have  been  far  better  if  the 
foundation  had  undertaken  to  hand  over  to  each 
institution  that  had  adopted  or  would  adopt  a 
pension  system  an  endowment  from  the  income 
of  which  the  professors '  salaries  could  have  been 
maintained  for  life.  Even  if  it  were  decided  to 
give  a  pension  smaller  than  the  salary,  the  en- 
dowment might  with  equal  advantage  be  made 
once  for  all.  The  foundation  could  in  this  case 
take  up  one  institution  after  another  and  from 
its  income  award  a  fund  sufficient  to  endow  a 
pension  scheme  in  each.  Under  these  circum- 
stances, the  income  would  never  be  completely 
tied  up,  but  could  always  be  used  in  the  way 
most  likely  to  promote  the  advancement  of  teach- 
ing. The  same  plan  might  with  great  advantage 
be  pursued  by  the  Carnegie  Institution  of  Wash- 
ington. If  instead  of  attempting  to  administer 
from  Washington  scientific  institutions  in  all 
parts  of  the  country,  it  would  found  and  partly 
endow  such  institutions,  and  then  leave  them  to 
local  control  and  support,  the  money  would  go 
much  farther  and  the  dangers  of  a  bureaucracy 
would  be  avoided. 


110  CABNEGIB 

The  drawbacks  of  a  centralized  pension  sys- 
tem may  be  illustrated  by  an  example.  A  pro- 
fessor has  reached  the  age  limit  with  a  salary  of 
$4,000.  He  prefers  to  continue  his  regular 
teaching  and  research  and  can  do  so  compe- 
tently. If  the  institution  had  to  continue  his 
salary,  it  would  have  no  inclination  to  relieve 
him  of  his  duties,  nor  would  it  care  to  do  so  if 
it  had  to  pay  a  pension  of  $2,400,  for  in  this 
case  the  $1,600  released  would  not  suffice  for  the 
salary  of  a  new  professor.  But  if  the  payment 
of  the  professor's  pension  can  be  put  off  on  the 
Carnegie  Foundation,  then  the  president  will 
reflect  that  he  can  obtain  a  new  man  about 
equally  competent  for  $3,000.  He  will  thus  save 
$1,000,  and  the  institution  will  still  have  credit 
for  the  work  of  the  retired  professor;  the  stu- 
dents he  attracts;  the  indirect  teaching  that  a 
man  engaged  in  research  at  the  university  can 
not  fail  to  do ;  his  valuable  judgment  and  coun- 
sel. The  institution  saves  $1,000  and  gets 
$2,400  more  that  it  could  not  get  in  any  other 
way.  At  first  sight  it  may  seem  that  no  one 
suffers  except  the  dismissed  professor;  but  in 
the  end  it  will  be  found  that  the  institution  and 
higher  education  also  suffer. 

The  risks  of  the  system  for  the  professor  are 
increased  by  the  scheme  of  retirement  after 
twenty-five  years  of  service.  Sixteen  of  the  most 
efficient  professors  in  Harvard  University  and 
fifteen  in  Columbia  University  are  now  liable  to 


PENSIONS  111 

compulsory  retirement  apart  from  age;  and 
owing  to  the  great  growth  of  these  universities 
within  the  past  twenty  years,  the  number  of 
men  in  this  class  will  increase  rapidly.  These  in- 
stitutions could  take  from  the  Carnegie  Founda- 
tion about  $75,000  a  year  now  by  retiring  these 
men  and  probably  two  or  three  times  as  much 
a  few  years  hence.  If  the  emeritus  professors 
maintained  their  interest  in  the  institution  and 
continued  their  research  work,  the  university 
would  apparently  lose  but  little  in  return  for 
the  great  financial  gain.  But  the  professors 
would  suffer,  and  ultimately  the  whole  academic 
life  would  be  demoralized. 

The  reasons  leading  to  the  adoption  of  retire- 
ment after  twenty-five  years  of  service  are  ob- 
scure to  me,  unless  it  is  intended  to  relieve  in- 
stitutions of  men  whom  they  do  not  want  to 
keep.  Some  few  professors  having  independent 
means  or  outside  employment  may  like  to  retire 
on  half  salary;  but  these  are  exactly  those  who 
do  not  need  pensions.  Any  who  may  be  dis- 
abled after  twenty-five  years  of  service  and  be- 
fore reaching  the  age-limit  gain ;  they  are,  how- 
ever, but  few  and  should  be  otherwise  provided 
for.  It  appears  to  be  a  mistake  to  hold  up  re- 
tirement from  the  life-work  of  a  professor  as  a 
prize  or  reward.  The  usual  professor  can  not 
afford  to  retire  unless  he  engages  in  money-ma- 
king, and  the  plan  will  thus  lead  to  commercial- 
ism and  the  discouragement  of  research.    He  is 


112  CABNEGIE 

permitted  by  the  rules  to  do  anything  except 
teach — that  for  which  he  should  be  most  com- 
petent and  that  which  he  should  most  enjoy. 
Eesearch  work  and  advanced  teaching  can  be 
carried  on  far  better  in  conjunction  than  di- 
vorced. In  order  to  reward  a  professor  after 
long  years  of  service,  he  should  be  relieved,  not 
of  half  of  his  salary  and  the  privilege  of  teach- 
ing, but  of  so  much  routine  instruction  and  ad- 
ministration as  interfere  with  his  research.  This 
is  now  done  in  our  better  universities ;  professors 
of  distinction  who  wish  to  devote  themselves 
mainly  to  advanced  students  and  research  work 
are  encouraged  to  do  so. 

There  is  a  minor  difficulty  in  the  way  of  re- 
tirement— whether  it  is  to  be  a  reward  or  a  pun- 
ishment— after  twenty-five  years  of  service  as 
professor  in  that  it  is  impossible  to  date  fairly 
the  beginning  of  such  service.  In  every  univer- 
sity some  professors  between  the  ages  of  fifty 
and  sixty-five  will  be  liable  to  retirement  on  the 
basis  of  age  and  others  not,  but  there  will  be  no 
significant  difference  in  the  work  that  has  been 
accomplished  for  education  and  scholarship  by 
the  two  classes.  According  to  the  circumstances 
of  the  case,  it  will  be  an  advantage  or  a  risk  to 
have  been  given  the  title  of  professor  at  an  early 
age  in  a  small  institution.  It  may  on  the  whole 
be  regarded  as  fortunate  that  the  Carnegie 
Foundation  has  not  the  means  to  continue  these 
annuities  for  length  of  service.     They  will,  I 


PENSIONS  113 

fear,  tend  to  demoralize  both  the  **  humble  and 
ill-compensated"  professor  and  the  ** conspicu- 
ous" and  much-tempted  president. 

A  very  useful  service  that  the  Caraegie  Foun- 
dation could  perform  for  the  professor  and  for 
academic  life  would  be  some  form  of  pension  for 
disability,  as  this  can  not  be  purchased.     An- 
other useful  service  would  be  the  pensioning  of 
widows    and    minor    children.      Personally,    I 
should  prefer  to  let  the  professor  purchase  vol- 
untarily at  cost  the  disability  annuity  and  the 
life  insurance ;  but  I  am  instinctively  an  extreme 
individualist.     Certainly  the  pensioning  of  the 
widows  of  professors  entitled  to  pensions  by 
statute  instead  of  by  favor  is  a  notable  advance 
made  by  the  foundation  last  year.    The  enforced 
pensioning  of  widows  is  even  more  socialistic 
than  the  enforced  purchase  of  annuities ;  for  ul- 
timately the  unmarried  professors  will  be  com- 
pelled to  pay  part  of  the  premiums  on  behalf  of 
their  more  fortunate  colleagues.    But  it  may  be 
that  people  who  bring  up  children  deserve  more 
from  the  world;  certainly  those  who  have  only 
the  annual  income  which  they  earn  for  those  de- 
pendent on  them  should  insure  their  lives,  and 
perhaps  they  should  be  compelled  to  do  so.    The 
weakness  of  the  system  of  the  Carnegie  Founda- 
tion is  that  it  applies  only  where  it  is  least 
needed.    It  is  the  instructor  or  junior  professor 
with  young  children,  having  had  no  chance  to 


114  CABNEGIE 

save,  who  finds  it  hard  to  pay  an  insurance 
premium  and  sometimes  neglects  it. 

It  is  not  clear  to  the  writer  how  it  was  esti- 
mated that  a  fund  of  five  million  dollars  would 
provide  pensions  for  the  state  universities  and 
colleges.  The  demands  on  the  foundation  will 
depend  on  whether  retirement  is  mandatory  or 
whether  it  ordinarily  follows  only  on  disable- 
ment. At  Harvard  University  there  are  at  pres- 
ent seven  professors  on  the  retired  list,  two 
widows  receive  pensions,  and  the  cost  to  the 
foundation  is  $16,305.  There  are  twenty-eight 
other  professors  now  eligible  to  receive  allow- 
ances. Should  they  be  compelled  to  retire  or 
wish  to  do  so,  the  total  charge  of  Harvard  Uni- 
versity on  the  foundation  would  be  about 
$75,000. 

Even  with  a  stationary  number  of  professors 
and  stationary  salaries,  there  are  two  circum- 
stances which  will  add  greatly  to  the  cost  of  the 
system.  One  of  these  is  the  *'age  distribution 
of  the  population, ' '  a  factor  which  the  trustees 
of  the  foundation  may  not  have  considered,  as 
it  appears  to  have  been  completely  overlooked 
by  both  advocates  and  opponents  of  the  old-age 
pensions  in  Great  Britain.  The  population  of 
that  country,  through  a  high  birth  rate  from 
1850  to  1900,  has  increased  greatly  since  the 
middle  of  the  last  century,  and  the  people  form 
a  youthful  population.  There  are  probably  two 
to  three  times  as  many  people  over  seventy  years 
of  age  per  thousand  of  the  population  in  France, 


PENSIONS  115 

with  its  stationary  population,  as  in  Great  Brit- 
ain. The  British  chancellor  of  the  exchequer 
will  be  awakened  to  the  apparently  unexpected 
circumstance  that  the  number  of  those  entitled 
to  pensions  from  the  government  will  be  doubled 
or  tripled  apart  from  any  increase  in  population. 
Similar  conditions  obtain  in  our  universities 
which  have  more  than  doubled  the  number  of 
their  professors  in  the  course  of  the  past  twenty 
or  thirty  years.  Nearly  all  those  appointed  to 
professorships  were  young  and  are  now  growing 
old  together.  In  twenty-five  years  the  relative 
number  of  professors  over  sixty-five  will  prob- 
ably be  doubled  or  tripled.* 

»In  the  faculty  of  pure  science  of  Columbia  Univer- 
eity  there  are  fifty-two  professors,  the  ages  of  forty- 
seven  of  whom  are  given  in  *  *  American  Men  of  Science. ' ' 

The  distribution  is: 

\ 

Age  Number 

30-35    4 

35-40    8 

40-45   12 

45-50   9 

60-55   9 

55-60   1 

60-65   8 

65-70   0 

70-75   1 

The  median  expectation  of  life  of  these  men  is  at  least 
twenty-five  years,  and  we  may  expect  that  more  than  one 
half  of  the  thirty-four  now  between  forty  and  sixty-five 
will  still  be  living  twenty-five  years  hence.  In  the  place 
of  one  man  over  sixty-five  years  of  age  and  eligible  to 
be  pensioned  for  age  (there  is  now  none  retired  on  a 
pension),  there  will  be  seventeen. 


116  CABNEGIE 

The  other  circiimstance  that  will  increase  the 
demands  on  the  funds  of  the  foundation  is  the 
pensioning  of  widows.  Professors  are  nearly  or 
quite  as  likely  as  not  to  leave  widows,  and  the 
expectation  of  life  of  their  widows  will  be  nearly 
or  quite  as  great  as  their  own  when  eligible  for 
annuities.  Thus  the  cost  of  the  widows'  pen- 
sions will  ultimately  be  nearly  or  quite  one 
fourth  the  cost  of  the  annuities.  It  is  further 
to  be  noted  that  all  widows  will  receive  pensions, 
even  though  a  considerable  proportion  of  those 
entitled  to  annuities  do  not  draw  them. 

It  consequently  appears  that  with  the  same 
number  of  professors  and  the  same  salaries  as 
at  present,  Harvard  University  would  after  a 
few  years  be  able  to  take  from  the  foundation  at 
least  $150,000  a  year  in  annuities  and  at  least 
$35,000  in  widows'  pensions.  How  much  would 
actually  be  taken  for  annuities  would,  of  course, 
depend  on  whether  or  not  retirement  were  man- 
datory or  generally  adopted. 

The  number  of  professors  will  not  remain  sta- 
tionary, nor  will  salaries  remain  stationary. 
Harvard  has  about  doubled  in  size  in  the  past 
twenty  years  and  quadrupled  in  size  in  the  past 
forty  years.  Even  should  this  rate  of  growth 
not  continue  at  Harvard,  it  will,  I  believe,  be 
maintained  on  the  average  and  will  be  exceeded 
in  the  state  universities.  Harvard  and  Columbia 
may  in  forty  years  have  four  times  as  many  pro- 
fessors as  they  now  have;  Michigan,  Illinois, 


PENSIONS  117 

Wisconsin  and  the  other  state  universities  will 
almost  surely  have  four  times  as  many.  It  is  a 
modest  hope  that  salaries  will  increase  fifty  per 
cent.  The  cost  in  a  great  university  of  a  pension 
system  such  as  that  of  the  Carnegie  Foundation, 
if  all  retire  who  are  eligible,  may  forty  years 
hence  be  expected  to  be  in  the  neighborhood  of 
one  million  dollars  a  year.  If  at  that  time  trust 
funds  bring  3  per  cent,  interest,  it  will  require 
$30,000,000  to  endow  a  pension  system  for  a 
single  university;  and  there  will  probably  be 
not  fewer  than  twenty  such  with  a  hundred 
others  tending  to  become  such. 

Forty  years  hence  some  two  billion  dollars 
may  be  required  to  endow  completely  a  central- 
ized pension  scheme  for  North  America  such  as 
that  of  the  Carnegie  Foundation.  Nor  is  this  too 
long  to  look  ahead.  Young  men  of  twenty-five, 
now  entering  the  academic  career  and  accepting 
smaller  salaries  in  view  of  a  pension  at  sixty- 
five,  will  not  be  honorably  treated  should  it  be 
withdrawn.  Indeed  they  can  possibly  recover 
the  pension  at  law. 

The  figures  given  here  may  seem  somewhat 
appalling;  but  they  are  really  not  so.  If  pen- 
sions are  only  paid  for  disability  at  any  period 
in  the  lives  of  university  teachers  and  to  their 
widows  and  minor  orphans — I  believe  that  no 
other  kinds  of  pensions  are  desirable — the  cost 
would  be  piuch  less.  It  would  represent  a  cap- 
ital far  beyond  the  possibility  of  private  endow- 


118  CABNEGIE 

ment,  but  would  be  a  sum  not  considerable  in 
comparison  with  the  wealth  of  the  country. 
Twenty  times  the  amount  could  to  advantage  be 
saved  each  year  by  a  reasonable  reduction  in  the 
expenditure  on  alcoholic  drinks.  The  economic 
gain  to  the  nation  and  to  the  world  from  the  re- 
search work  of  university  professors  far  exceeds 
their  salaries  and  their  pensions,  even  though  no 
account  be  taken  of  the  value  of  their  teaching 
or  of  their  contribution  to  ideal  ends.  The  more 
scientific  men  the  world  supports,  the  richer  will 
it  become,  as  well  as  the  better.  But  the  nation, 
the  states  and  the  cities  must  maintain  their 
universities. 


THE  LENGTH   OP   SERVICE  PENSIONS   OF 
THE  CARNEGIE  FOUNDATION^ 

Either  as  cause  and  effect  or  as  a  matter  of 
mere  time  sequence,  the  writer  has  anticipated 
in  this  journal  the  most  important  actions  taken 
by  the  trustees  of  the  Carnegie  Foundation  at 
their  two  last  annual  meetings.  There  was 
printed  in  Science  for  April  24,  1908,  corre- 
spondence with  the  president  of  the  foundation 
urging  that  the  pensions  of  widows  of  professors 
entitled  to  retiring  allowances  should  be  made  a 
matter  of  right  rather  than  a  matter  of  optional 
favor,  and  at  the  meeting  of  the  trustees  in  No- 
vember this  was  done.  It  seems  that  this  subject 
is  not  treated  clearly  by  the  president  in  his 
last  annual  report.  Referring  to  the  first  adop- 
tion of  the  rules  of  the  foundation  he  says : 

The  underlying  principles  which  seemed  to  be  clear 
were  these  .  .  .  (5)  The  retiring  allowance  system 
should  embrace  in  its  provisions  the  widows  of  teachers 
who  under  the  rules  had  become  eligible  to  retiring  al- 
lowances. ...  A  third  rule  provided  for  the  pension  for 
the  widow  of  any  teacher  who,  either  on  the  ground  of 
age  or  service,  was  entitled  to  a  retiring  allowance. 
These  rules  have  now  been  in  operation  for  four  years. 

In  the  first  annual  report,  however,  it  was  ex- 
plicitly pointed  out  that  *  *  In  all  cases,  the  grant- 
ing of  pensions  to  widows  of  professors  stands 

1  Printed  in  Science,  March  11,  1910. 
119 


120  CABNEGIE 

upon  a  different  basis  than  that  of  the  awarding 
of  retiring  allowances  to  professors, ' '  and  in  the 
third  annual  report  it  is  noted  that  **  heretofore 
the  pensions  to  widows  have  been  only  per- 
missory. '  ^ 

I  venture  to  note  my  service  to  my  colleagues 
in  this  direction,  as  some  of  them  think  that  I 
have  performed  a  disservice  in  pointing  out  what 
seemed  to  me  the  dangers  of  the  length  of  serv- 
ice pensions.  In  Science  for  April  2,  1909^  I 
wrote : 

The  reasons  leading  to  the  adoption  of  retirement  after 
twenty-five  years  of  service  are  obscure  to  me  unless  it 
is  intended  to  relieve  institutions  of  men  whom  they  do 
not  want  to  keep.  ...  In  order  to  reward  a  professor 
after  long  years  of  service,  he  should  be  relieved  not  of 
half  of  his  salary  and  the  privilege  of  teaching,  but  of 
so  much  routine  instruction  and  administration  as  inter- 
fere with  his  research.  ...  It  may  on  the  whole  be  re- 
garded as  fortunate  that  the  Carnegie  Foundation  has 
not  the  means  to  continue  these  annuities  for  length  of 
service.  They  will,  I  fear,  tend  to  demoralize  both  the 
** humble  and  ill-compensated''  professor  and  the  ** con- 
spicuous'* and  much-tempted  president. 

My  anticipations  were  soon  justified  by  the 
troubles  at  the  George  Washington  University, 
which  retired  on  the  foundation  two  of  its  pro- 
fessors against  their  will  in  order  to  save  their 
salaries  and  because  they  did  not  agree  with  the 
policies  of  the  administration,  and  which  then 
was  dropped  from  the  list  of  institutions  ac- 
cepted by  the  foundation.    I  was,  however,  not 


PENSIONS  121 

less  surprised  than  my  colleagues  to  learn  that 
the  trustees  of  the  Carnegie  Foundation  on  No- 
vember 17  had  not  only  abolished  the  retiring 
allowance  for  length  of  service,  but  had  made 
their  action  apply  to  those  to  whom  the  pensions 
had  been  promised. 

This  action  would  be  absolutely  incomprehen- 
sible if  it  were  based  on  the  grounds  alleged  by 
the  president  in  his  annual  report,  which  has 
just  now  been  printed.  He  does  not  even  re- 
motely refer  to  the  financial  inability  of  the 
foundation  to  carry  out  the  obligations  it  had 
assumed,  but  bases  his  recommendation  on  the 
fact  that  he  has  unexpectedly  discovered  that 
presidents  and  professors  take  advantage  of  the 
rule,  and  that  its  effect  is  not  **good"  owing  to 
**the  opportunity  which  is  thus  opened  to  bring 
pressure  to  bear  on  the  teacher,  or  by  the  tend- 
ency of  the  teacher  assured  of  a  retiring  allow- 
ance to  become  ultra-critical  toward  the  admin- 
istration." This  last  clause  throws  a  curious 
light  on  the  administrative  attitude — it  would 
be  dangerous  to  let  the  professor  criticize  the 
administration  if  thereby  he  risked  losing  only 
half  of  his  salary  and  not  all  of  it. 

President  Pritchett  says:  **The  expectation 
that  this  rule  would  be  taken  advantage  of  al- 
most wholly  on  the  ground  of  disabilities  has 
proved  to  be  ill  founded."  But  what  warrant 
had  the  trustees  for  this  expectation!  The  act 
of  incorporation  states  that  the  object  of  the 


122  CABNEGIE 

foundation  is  to  provide  retiring  pensions  for 
teachers  who  ''by  reason  of  long  and  meritorious 
service,  or  by  reason  of  old  age,  disability  or 
other  sufficient  reason  shall  be  entitled  to  the 
assistance  and  aid  of  this  corporation.''  The 
rule  adopted  in  regard  to  the  first  of  the  two 
classes  of  pensions  specified  in  the  act  of  incor- 
poration reads:  ''Any  person  who  has  had  a 
service  of  twenty-five  years  as  a  professor  and 
who  is  at  the  time  a  professor  in  an  accepted  in- 
stitution, shall  be  entitled  to  a  retiring  allow- 
ance computed  as  follows/' 

The  change  in  the  attitude  of  the  president  of 
the  foundation  has  been  as  sudden  as  it  is  com- 
plete. In  a  letter  to  him,  written  on  March  21, 
1908,  I  said  that  the  wisdom  of  the  length  of 
service  pension  was  doubtful,  and  in  his  reply, 
intended  for  publication  in  Science  and  printed 
in  the  issue  of  April  24,  1908,  he  wrote : 

The  provisian  for  permitting  a  retiring  allowance  to  be 
gained  upon  length  of  service  seema  also  to  us  to  add 
much  to  the  value  of  the  retiring  allowance  system. 
Under  this  provision  a  professor  may,  at  the  end  of 
twenty-five  years,  retire  on  a  stated  proportion  of  his 
salary,  the  proportion  increasing  with  each  year  of  serv- 
ice. It  is  not  likely  that  many  professors  will  avail  them- 
selves of  this  provision.  The  man  whose  heart  is  in  his 
teaching  will  not  wish  to  give  it  up  until  a  much  later 
period.  There  are,  however,  teachers  to  whom  this  pro- 
vision will  be  specially  attractive,  and  that  is  to  those 
who  desire  to  spend  the  remainder  of  their  active  lives 
in  scholarly  research  or  literary  work  rather  than  in 
teaching.    I  can  imagine  no  better  thing  for  an  institu- 


PENSIONS  128 

tion  of  learning  than  to  have  about  it  a  group  of  men 
who  are  engaged  in  active  research  and  who  are  not 
burdened  with  the  load  of  teaching  which  falls  to  most 
American  teachers.  In  this  way  the  retiring  allowance 
will  contribute  directly  to  research. 

Dr.  David  Starr  Jordan,  one  of  the  trustees, 
is  much  franker  than  the  president.  He  writes 
to  the  Evening  Post  that  it  seemed  **  financially 
impossible'*  for  the  foundation  to  meet  the  de- 
mands made  on  it  under  the  rule.  This  is  cer- 
tainly a  valid  ground  for  not  admitting  to  its 
privileges  additional  institutions  or  those  not 
yet  professors ;  but  according  to  law  resort  must 
be  had  to  the  bankruptcy  court  when  financial 
obligations  can  not  be  met.  Whether  the  foun- 
dation is  liable  to  those  who  have  been  financially 
injured  by  the  change  in  the  rule  is  an  open 
question.  Probably  the  only  precedent  is  the 
case  of  Professor  Capps  against  the  University 
of  Chicago,  in  which  it  was  decided  that  a  uni- 
versity can  not  alter  its  statutes  to  the  financial 
disadvantage  of  a  professor.  It  seems  that  it 
might  be  urged  that  the  foundation  has  made  an 
implicit  contract  with  the  professor.  To  encour- 
age the  advancement  of  teaching  it  promises  cer- 
tain rewards  to  those  who  perform  certain  serv- 
ices. Those  who  have  performed  the  services 
can  perhaps  recover  at  law  the  payment  prom- 
ised. But  whatever  the  legal  obligation  may  be, 
the  moral  responsibility  is  obvious.  President 
Pritchett  writes  that  the  **  change  will  command 


124  CARNEGIE 

the  approval  of  the  great  body  of  devoted  and 
able  teachers/^  When  he  learns  of  his  extra- 
ordinary error,  he  will,  it  may  be  hoped,  recom- 
mend such  modification  of  the  new  rule  as  will 
be  accepted  as  equitable  by  those  concerned. 

The  president  of  the  foundation  writes:  **It 
is  part  of  the  invariable  policy  of  the  Carnegie 
Foundation  to  place  in  the  hands  of  those  inter- 
ested in  education  the  fullest  details  respecting 
the  foundation  and  its  administration. ' '  But  it 
is  not  clear  that  the  foundation  has  been  entirely 
frank  in  the  present  instance.  The  ofiicial  state- 
ment in  regard  to  the  rules  signed  by  the  secre- 
tary of  the  board  of  trustees  reads : 

The  rules  as  thus  amended  provide  a  retiring  allaw- 
ance  for  a  teacher  on  two  distinct  grounds:  (1)  to  a 
teacher  of  specified  service  on  reaching  the  age  of  sixty- 
five;  (2)  to  a  teacher  after  twenty-five  years  of  service 
in  case  of  physical  disability. 

Although  these  are  the  general  rules  governing  retire- 
ment, the  trustees  are  nevertheless  willing  to  grant  a  re- 
tiring allowance  after  the  years  of  service  set  forth  in 
Eule  1  [Rule  2?]  to  the  rare  professor  whose  proved  abil- 
ity for  research  promises  a  fruitful  contribution  to  the 
advancement  of  knowledge  if  he  were  able  to  devote  his 
entire  time  to  study  or  research;  and  the  trustee  may 
also  grant  a  retiring  allowance  after  the  years  of  service 
set  forth  in  Rule  1  [sic]  to  the  executive  head  of  an  insti- 
tution who  has  displayed  distinguished  ability  as  a 
teacher  and  educational  administrator. 

Dr.  Jordan  has  printed  the  actual  resolution 
adopted  by  the  trustees,  as  follows: 


PENSIONS  125 

It  was  also  on  motion,  duly  made  and  seconded,  re- 
solved that  first,  the  executive  committee  be  instructed 
to  safeguard  the  interests  of  the  following  classes  of 
cases:  (a)  those  who  have  research  work  in  view  and 
have  shown  themselves  unmistakably  fit  to  pursue  it;  (ft) 
those  whose  twenty-five  years  of  service  includes  service 
as  a  college  president;  and  (c)  those  in  whose  mind  a 
definite  expectation  has  been  created  by  official  action 
that  they  will  be  accorded  the  benefits  of  the  founda- 
tion within  the  year  1910 ;  and  that,  secondly,  the  execu- 
tive committee  be  authorized  to  formulate  regulations 
in  accordance  with  these  instructions. 

It  is  difficult  to  reconcile  the  statement  under 
(a)  with  the  announcement  of  the  secretary.  In 
the  case  of  (6)  one  can  only  reconcile  the  two 
versions  by  assuming  that  the  presidents  who 
make  up  the  board  believe  that  there  can  be  no 
college  president  who  has  not  **  displayed  dis- 
tinguished ability  as  a  teacher  and  educational 
administrator.  * '  It  is  not  easy  to  guess  a  cred- 
itable reason  for  not  having  made  (c)  public, 
for  it  would  not  be  honorable  to  conceal  it  in 
order  to  save  the  money  due  to  those  who  might 
apply  under  the  resolution  if  it  were  known  to 
them. 

It  is  certainly  odd  that  a  board  of  trustees 
consisting  of  university  and  college  presidents 
should  increase  the  maximum  pension  from 
$3,000  to  $4,000,  which  can  practically  only  be 
of  advantage  to  the  comparatively  highly  sal- 
aried president,  and  should  retain  the  privilege 
of  retiring  after  twenty-five  years,  when  this  is 
denied  to  the  professors  through  the  financial 
9 


126  CABNEGIE 

inability  of  the  foundation.  But  perhaps  they 
assume  that  higher  education  can  be  best  ad- 
vanced by  retiring  the  president  whenever  pos- 
sible. 

The  lack  of  foresight  and  expert  knowledge 
displayed  by  the  president  and  trustees  of  the 
foundation  is  truly  astounding.  Mr.  Carnegie 
wrote  in  his  original  letter  to  the  trustees : 

I  have,  therefore,  transferred  to  you  and  your  succes- 
©ora,  as  trustees,  $10,000,000,  5  per  cent,  first  mortgage 
bonds  of  the  United  States  Steel  Corporation,  the  revenue 
from  which  is  to  provide  retiring  pensions  for  the  teach- 
ers of  universities,  college®  and  technical  schools  in  our 
country,  Canada  and  Newfoundland  under  such  condi- 
tions as  you  may  adopt  from  time  to  time.  Expert  cal- 
culation shows  that  the  revenue  will  be  ample  for  the 
purpose. 

In  making  his  additional  gift  for  tax-supported 
institutions,  he  wrote  to  the  president : 

I  understand  from  you  that  if  all  the  state  universi- 
ties should  apply  and  be  admitted,  five  million  more  of 
five  per  cent,  bonds  would  be  required. 

As  a  matter  of  fact,  a  million  dollars  will  not 
support  an  adequate  pension  fund  in  a  single 
large  university — Yale  already  draws  $35,000  a 
year — and  if  the  state  universities  continue  to 
develop,  as  at  present,  and  retirement  at  sixty- 
five  is  made  obligatory,  five  million  dollars  will 
not  permanently  suffice  for  a  single  university. 
The  increase  in  the  appropriations  of  the 
foundation  for  pensions  this  year  is  $162,815, 


PENSIONS  127 

and  the  total  appropriation  for  pensions  is  $466,- 
320.  The  total  income  of  the  foundation  last 
year  was  $544,355,  and  the  administrative  ex- 
penses were  $53,584.85.  After  Mr.  Carnegie 
gives  the  additional  five  million  dollars,  the  in- 
come will  soon  be  exhausted,  even  though  one  of 
the  two  objects  of  the  foundation,  as  stated  in 
the  act  of  incorporation,  may  be  abandoned. 


THE  FIFTH  ANNUAL  REPORT  OF  THE 

PRESIDENT  OF  THE  CARNEGIE 

FOUNDATIONi 

President  Pritchett*s  annual  report  gives 
a  full  and  clear  statement  of  the  business  of  the 
Carnegie  Foundation  for  the  Advancement  of 
Teaching  during  the  year  ending  November  30, 
1910,  and  includes  an  essay  on  the  relations  of 
colleges  and  secondary  schools. 

The  University  of  California,  Indiana  and 
Purdue  Universities,  and  Wesleyan  University 
have  been  added  to  the  accepted  list  of  the  foun- 
dation. The  two  state  universities — for  Indiana 
and  Purdue  form  together  essentially  one  state 
university — obviously  meet  standards  which  al- 
low the  admission  of  colleges  such  as  Beloit,  Car- 
leton,  Coe,  Dickinson,  Drake,  Drury  and  Knox. 
The  tax-supported  universities  previously  ad- 
mitted are  Michigan,  Wisconsin,  Minnesota, 
Missouri  and  Toronto.  It  seems  to  the  present 
writer  most  unfortunate  that  the  executive  com- 
mittee of  the  foundation  should  prescribe  to  the 
state  universities  what  they  must  do  in  order  to 
receive  pensions.  Illinois  has  been  told  that  it 
must  break  the  agreement  which  it  made  with 
the  professors  of  the  medical  school  in  Chicago ; 
Ohio  that  it  must  reconstruct  its  educational 
policy,  and  the  like.    It  is  to  be  hoped  that  those 

1  Printed  in  Science,  March  3,  1911. 
128 


PENSIONS  129 

in  control  of  the  state  universities  will  resent 
such  dictation.  Indeed  one  can  not  altogether 
dismiss  the  suspicion  that  the  officers  of  the 
foundation  have  the  same  hope,  in  order  to  be 
released  from  obligations  which  they  could  not 
meet. 

Wesleyan  University  has  amended  the  char- 
ter which  made  it  ultra-denominational — for  it 
required  not  only  the  president  and  a  majority 
of  the  trustees,  but  also  a  majority  of  the  pro- 
fessors to  be  members  of  the  methodist  episcopal 
church — and  although  one  fourth  of  the  trus- 
tees are  elected  by  the  conferences  of  the  church, 
it  has  complied  with  the  rules  of  the  foundation. 
Other  institutions  which  are  altering  or  trying 
to  alter  their  church  affiliations  should  know  that 
the  foundation  will  be  very  cautious  in  assuming 
further  financial  responsibility. 

This  appears  to  be  at  last  clearly  acknowl- 
edged by  the  president  and  the  executive  com- 
mittee. The  president  makes  the  acknowledg- 
ment retroactive  when  he  writes : 

In  every  report  issued  by  the  Oamegie  FoundAtion,  the 
effort  has  been  made  to  call  the  attention  of  colleges  and 
universities  to  the  fact  that  the  endowment  in  the 
hands  of  its  trustees  would  provide  at  most  an  adequate 
retiring  aUowance  system  for  only  a  small  minority  of 
the  institutions  in  the  United  States  and  Canada  bear- 
ing the  name  college  or  university.  This  was  most 
strongly  urged  even  in  the  First  Annual  Report. 

But   in   his   first    annual    report,    President 


130  CABNEGIE 

Pritchett  estimated  that  with  the  original  en- 
dowment the  foundation  could  accept  from  one 
hundred  to  one  hundred  and  twenty  institu- 
tions,^ including  payment  of  pensions  for  length 
of  service.    He  wrote : 

It  may  therefore  ibe  safely  assumed  that  while  the  in- 
come of  the  Foundation  is  sufficient  to  carry  out  the  orig- 
inal plan  of  the  Founder  it  is  not  sufficient  to  extend 
the  system  of  pensions,  at  least  at  first,  beyond  the  scope 
which  he  indicated  in  his  letter  of  gift.  It  would  seem 
therefore  clearly  the  true  policy  of  the  Trustees  at  the 
inauguration  of  the  Foundation  to  work  within  these 
limits,  giving  a  generous  interpretation  to  the  terms 
** sectarian ' *  and  ''state'*  control. 

In  his  letter  of  gift,  Mr.  Carnegie  wrote: 
*  *  Expert  calculation  shows  that  the  revenue  will 
be  ample"  **to  provide  retiring  pensions  for  the 
teachers  of  Universities,  Colleges  and  Technical 
Schools  in  our  country,  Canada  and  New  Found- 
land." 

The  state  of  the  finances  of  the  foundation  is 
shown  in  the  report  of  the  treasurer,  from  which 
it  appears  that  the  receipts  for  the  year  were 
$543,881  and  the  expenditures  $538,148,  leaving 
a  surplus  income  less  than  $6,000.  The  obliga- 
tions undertaken  for  the  current  year  leave  a 
deficit  of  nearly  $100,000.  This  will  doubtless 
be  met  from  the  income  of  the  further  ^ye  mil- 
lion dollars  which  Mr.  Carnegie  has  consented 

2  More  than  existed,  having  the  educational  standards 
required  by  the  foundation,  and  being  non-denomina- 
tional and  non-tax-supported. 


PEmiONS  181 

to  give  for  tax-supported  institutions.  He  wrote 
to  the  president  of  the  foundation  on  March  31, 
1908:  **I  understand  from  you  that  if  all  the 
State  Universities  should  apply  and  be  admitted 
Five  Millions  more  of  five  per  cent,  bonds  would 
be  required.'*  But  there  are  eighty-three  insti- 
tutions supported  by  states  and  provinces,  of 
which  but  eight  have  as  yet  been  admitted  to  the 
accepted  list  of  the  foundation. 

If  such  of  these  institutions  are  accepted  as 
fulfil  the  educational  requirements  originally  set 
by  the  foundation,  the  income  next  year  would 
not  meet  the  expenses,  and  thereafter  the  deficit 
will  increase  at  a  rate  not  not  less  than  $100,000 
a  year.  It  will  be  necessary  for  Mr.  Carnegie  to 
give  at  least  two  million  dollars  each  year  in 
order  that  the  income  may  meet  the  increased 
charges. 

Under  the  circumstances  it  is  not  surprising 
that  the  executive  committee  has  voted  that 

it  is  not  expedient  in  the  future  to  grant  retiring  allow- 
ances outside  of  the  accepted  Kst,  except  in  cases  of 
especial  significance  in  institutions  whose  standards  are 
so  advanced  that  within  a  short  time  the  institution  will 
be  ready  to  apply  for  admission  to  the  Foundation. 

How  incompletely  even  such  a  great  gift  as  Mr. 
Carnegie's  establishes  a  pension  system  for 
higher  education  throughout  the  country  is  illus- 
trated by  the  fact  that  Knox  College  is  the  only 
institution  accepted  in  the  state  of  Illinois  and 
Tulane  the  only  institution  south  of  Maryland 
and  Missouri. 


132  CARNEGIE 

The  financial  inability  of  the  foundation  ob- 
viously accounts  for  the  discontinuance  of  the 
len^h  of  service  pensions.  What  needs  explana- 
tion is  why  they  were  established,  why  they  were 
discontinued  in  the  manner  adopted  and  why 
they  were  not  paid  to  those  to  whom  they  had 
been  promised.  Suppose  that  Mr.  Carnegie  in 
order  to  get  better  domestic  servants  and  at 
lower  wages  had  promised  that  those  who  wished 
could  retire  after  twenty-five  years  of  service 
with  half  wages.  If  he  found  that  the  arrange- 
ment did  not  work  well  or  that  he  did  not  have 
enough  money  to  keep  up  his  establishment,  he 
might  very  well  have  employed  no  new  servants 
on  these  terms.  But  would  he  have  broken  his 
engagement  with  those  who  had  served  part  of 
the  time;  and,  if  so,  what  would  have  be^n  the 
decision  of  the  courts  if  suit  had  been  brought  ? 

In  his  report  Dr.  Pritchett  dismisses  the  break- 
ing of  the  pledges  of  the  foundation  lightly  with 
the  single  remark : 

1  The  experience  of  the  year  has  confirmed  in  the  judg- 
ment of  the  trustees  the  wisdom  and  essential  justice  of 
the  action  taken  a  year  ago. 

Now  this  is  a  truly  remarkable,  indeed  an  al- 
most incredible  state  of  affairs.  The  present 
writer  has  discuscsed  the  matter  with  some  two 
hundred  university  professors  in  the  course  of 
the  past  year,  and  so  far  as  he  remembers  not  a 
single  one  of  them  regarded  the  action  of  the 


PENSIONS  133 

trustees  as  other  than  unwise  and  unjust.  In 
the  act  of  incorporation  the  objects  of  the  foun- 
dation are  stated  to  be  to  provide  pensions  of 
two  kinds:  (1)  for  long  and  meritorious  service 
and  (2)  for  old  age,  disability  or  other  sufficient 
reason,  and  further  **to  do  and  perform  all 
things  necessary  to  encourage,  uphold  and  dig- 
nify the  profession  of  the  teacher  and  the  cause 
of  higher  education.*'  In  the  method  used  to 
give  up  the  pensions  for  length  of  service  the 
foundation  has  certainly  not  fulfilled  the  obli- 
gations specified  in  the  second  part  of  its  charter. 

It  is  obvious  that  unless  Mr.  Carnegie  greatly 
increases  the  endowment  of  the  foundation  it 
can  not  meet  its  present  obligations.  They  ob- 
tain most  of  all  in  the  case  of  the  younger  men 
now  entering  the  academic  career  in  view  of  its 
promises.  It  will  doubtless  be  necessary  to  give 
up  the  retiring  allowances,  for  age  and  confine 
them  to  disability.  The  present  writer  does 
not  regret  this,  for  reasons  which  he  has  fully 
stated  (Science,  April  2,  1909). 

Retirement  at  the  age  of  sixty-five  has  sub- 
stantially the  same  drawbacks  as  retirement 
after  twenty-five  years  of  service.  Men  who  are 
less  competent  or  who  are  not  in  favor  with  the 
administration  will  be  retired;  and  instead  of 
security  and  loyalty,  there  will  be  unrest  and 
bitterness.  The  president  will  be  quick  to  retire 
professors  because  their  pensions  are  not  paid 
by  his  institution,  but  from  an  outside  source. 


134  CABNEGIE 

There  is  no  more  reason  for  retiring  professors 
at  sixty-five  than  justices  of  the  supreme  court. 
There  should  be  pensions  (or  still  better  full  sal- 
aries after  long  terms  of  service)  for  disability, 
but  these  should  be  paid  by  the  university.  It 
would  have  been  far  better  if  the  Carnegie 
Foundation  had  given  its  income  as  an  endow- 
ment to  one  institution  after  another  for  the  es- 
tablishment of  a  pension  system.  Its  present 
financial  difficulties  would  have  been  avoided, 
and  the  dangers  of  a  centralized  autocracy 
would  have  been  escaped. 

It  is  to  be  hoped  that  when  the  trustees  of  the 
foundation  abandon  the  retiring  allowances  at 
the  age  of  sixty-five  years,  they  will  do  so  in  a 
manner  that  will  "encourage,  uphold  and  dig- 
nify the  profession  of  the  teacher  and  the  cause 
of  higher  education." 


TEN  YEARS  OF  THE  CARNEGIE 
FOUNDATION! 

By  Joseph  Jastrow 

The  first  and  largest  ground  for  the  establishment  of 
systems  of  retiring  pensions  for  teachers  has  been  found 
in  a  wish  to  strengthen  the  teaching  profession. — First 
Report  of  the  Carnegie  Foundation. 

A  REVIEW  of  SO  important  an  institution  as 
the  **Carne^e  Foundation  for  the  Advance- 
ment of  Teaching"  implies  the  acceptance  of  a 
serious  responsibility.  Under  ordinary  circum- 
stances the  reviewer  would  confine  himself  to  a 
critical  survey  of  the  plans  and  accomplishments 
of  the  foundation  and  an  appraisal  of  their  edu- 
cational and  social  significance.  Unfortunately 
the  career  of  the  foundation  in  the  ten  years  of 
its  existence  presents  a  questionable  departure 
from  the  policy  and  purposes  in  which  it  had  its 
origin ;  this  fact  disturbs  the  perspective  of  dis- 
cussion. The  serviceable  plan  will  be  to  consider 
the  scope  of  the  foundation ;  its  contribution  to 
educational  progress;  and  to  reserve  the  central 
place  for  the  examination  of  the  management  of 
the  retiring  allowances  which  were  established 
**to  strengthen  the  teaching  profession/'  ** to  at- 
tract into  it  increasing  numbers  of  strong  men," 
and  *  *  to  advance  its  social  dignity  and  stability. '  * 

1  Printed  in  School  and  Society,  October  7,  1916. 
135 


136  CABNEGIE 

The  favorable  comment — indeed,  the  enthu- 
siastic approval — with  which  the  announcement 
of  Mr.  Carnegie's  notable  philanthropy  was  re- 
ceived, is  as  valid  now  as  ten  years  ago  to  show 
the  public  and  professional  appreciation.  The 
first  obligation  and  privilege  of  the  reviewer  is 
to  express  to  Mr.  Carnegie  the  gratitude  of  the 
teaching  profession  for  his  recognition  of  a  need 
and  the  means  w'hereby  it  may  be  met.  The 
wisdom  of  the  benefaction  appears  in  the  recog- 
nition that  the  direct  method  of  stimulating  the 
intellectual  life  of  the  nation  is  by  provisions 
for  the  men  who  are  charged  with  the  intel- 
lectual interests;  that  this  can  be  done  by  im- 
proving the  personal  and  social  status  of  the 
teaching  profession  in  the  stronger  institutions 
of  learning ;  that  a  central  influence  for  this  end 
is  desirable  and  may  perform  a  unique  service. 
The  foundation  began  its  career  with  important 
assets:  the  good  will  of  the  public,  the  appre- 
ciation of  the  teaching  profession,  the  approval 
of  its  principles  and  the  measures  which  it  in- 
augurated to  relieve  defects  in  the  higher  edu- 
cation. 

University  life  in  this  country  lacks  any  com- 
prehensive centralizing  influences.  Education 
has  drifted  along,  indeed  muddled  through  in 
approved  Anglo-Saxon  fashion.  Yet  the  chaotic 
result  is  by  no  means  a  source  of  undisturbed 
satisfaction.  A  superfluous  number  of  small 
and  weak  colleges,  ambitious  in  project  and  lame 


PENSIONS  137 

in  performance,  a  confusing  injection  of  denomi- 
national control  and  purpose,  loose  relations  to 
preparatory  schools,  uncertain  standards  of 
scholarship,  poverty  and  the  stress  of  pioneer- 
ing, political  and  local  influences  equally  unin- 
telligent, a  low  appreciation  of  the  teaching  pro- 
fession— these  conditions  reflect  the  rapid  ex- 
pansion of  a  new  country  and  a  heterogeneous 
culture.  Here  as  elsewhere,  democracy  has  paid 
the  price  of  liberty  and  free  initiative.  Consid- 
ering the  handicaps  of  condition,  the  actual 
achievement  of  the  last  forty  years  and  the  in- 
creasing enlightenment  of  the  last  twenty  years 
present  in  retrospect  a  progress  comprehensive 
and  remarkable.  The  leadership  has  fallen  to 
a  group  of  men  in  the  several  centers  of  educa- 
tional influence,  inspired  by  a  responsible  initia- 
tive and  by  traditions  that  could  readily  absorb 
and  express  the  ideals  of  scholarship  and  expert 
service  demanded  by  an  expanding  democracy. 

In  such  weighty  matters  no  one  can  speak  with 
greater  authority  than  attaches  to  the  critical 
insight  of  the  group  with  which  he  finds  sym- 
pathy of  temperament,  ideals  and  experience. 
Thus  speaking,  one  may  express  the  conviction 
that  there  is  a  distinctive  place  for  a  central- 
izing influence  such  as  the  Carnegie  Foundation 
for  the  Advancement  of  Teaching;  that  indeed 
a  private  institution,  disinterested  and  with  the 
prestige  of  conferring  a  comprehensive  benefit, 
stands  in  a  peculiarly  favorable  position.    This 


138  CABNEGIE 

conclusion  strongly  endorses  the  decision  of  the 
foundation  to  conduct  a  series  of  investigations 
of  educational  problems ;  it  approves  the  attempt 
to  point  out  the  weak  points  in  educational  pro- 
visions and  to  la;bor  for  their  improvement;  it 
extends  this  approval  to  the  measure  of  defini- 
tion and  standardization  needed  for  a  reasonable 
working  conception  of  an  institution  that  may 
be  a  proper  candidate  for  the  benefits  it  has  to 
offer.  The  step  is  not  without  its  dangers.  Ex- 
treme or  mechanical  standardization  is  unde- 
sirable ;  small  colleges,  like  small  nations,  should 
be  encouraged  to  seek  salvation  in  their  own 
temper;  differences  when  spontaneous  are  more 
valuable  than  resemblances.  The  offer  of  benefit 
coupled  with  conditions,  if  unwisely  exercised, 
may  impose  where  it  should  be  content  to  en- 
courage. But  the  fact  remains  that  the  task  of 
introducing  some  orderly  conception  into  edu- 
cational ideals  and  practises  is  of  large  impor- 
tance. Some  would  look  to  the  national  govern- 
ment for  such  a  function.  It  is  doubtful  whether 
the  traditions  as  well  as  conditions  of  political 
office  in  this  country  are  favorable  to  such  a 
project,  even  if  there  were  a  secretary  of  educa- 
tion in  the  cabinet  and  an  organized  department 
at  his  command.  The  commissioner  of  educa- 
tion exercises  an  uncertain  jurisdiction,  which 
spreads  over  too  large  a  circuit  for  intensive  in- 
fluence; cooperation  rather  than  initiative  may 
reasonably  be  expected  of  that  office.    The  de- 


PENSIONS  139 

cision  of  the  foundation  to  make  itself  a  bureau 
of  inquiry  to  gather  and  interpret  information 
conducive  to  the  progress  of  educational  meth- 
ods and  standards,  led  (in  1913)  to  the  estab- 
lishment of  a  **  Division  of  Educational  En- 
quiry'* with  an  independent  endowment. 

The  bulletins  of  the  foundation  give  evidence 
of  the  value  of  the  function  thus  assumed.  The 
most  notable  is  the  comprehensive  study  by  Mr. 
Abraham  Flexner  of  medical  education  in  this 
country  and  in  Europe.  This  able,  critical  and 
frank  review  exposed  the  weaknesses  of  the 
laissez  faire  policy  (especially  under  the  temp- 
tation of  a  pecuniary  profit),  and  gave  an  ar- 
ticulate expression  to  medical  standards.  The 
comparison  with  foreign  institutions  clarified 
the  conception  of  professional  training  and  the 
dependence  of  progress  upon  scientific  ideals. 
Similar  surveys  of  professional  education  in  law 
and  engineering  are  in  progress,  with  definite 
reports  already  issued  on  certain  aspects  of  the 
problems  involved.  A  bulletin  upon  the  mooted 
question  of  efficiency,  though  not  extreme  in  its 
position,  lends  weight  to  an  irrelevant  estimate 
of  academic  values.  So  appalling  has  been  the 
sporadic  invasion  of  the  efficiency  engineer  into 
the  precincts  of  **the  academic  plant**  that  even 
the  semblance  of  warrant  (and  the  report  goes 
far  beyond  that)  adds  to  the  menace  which  the 
word  carries  to  those  to  whom  the  university  is 
hearth  and  home.    That  the  foundation  has  en- 


140  CARNEGIE 

tered  the  field  of  educational  surveys  with  an 
appreciation  of  the  serious  obligation  in  time  and 
money  and  expert  aid  that  it  implies,  is  shown 
by  the  report  upon  the  educational  provisions  of 
the  state  of  Vermont.  This  document  should 
make  impossible  the  travesty  of  hasty  and  irre- 
sponsible judgment  which  the  term  ** survey*' 
has  too  commonly  and  too  charitably  covered. 
Apart  from  the  one  instance  in  which  the  dig- 
nity, security  and  peace  of  mind  of  an  important 
university  were  ruthlessly  and  aimlessly  sac- 
rificed to  the  morbid  appetite  of  the  modem  in- 
quisitor, there  are  indications  that  the  *' survey'' 
idea  is  likely  to  spread  with  disastrous  conse- 
quences. The  foundation  may  be  looked  to  to 
set  the  standard  for  discerning  inquiry,  and 
eliminate  the  pretenders  from  this  too  inviting 
field.  With  a  similar  ideal  of  service  the  foun- 
dation has  reported  upon  a  few  cases  of  invasion 
of  academic  liberty  or  unjust  exercise  of  polit- 
ical authority.  This  function  it  may  now  wisely 
turn  over  to  the  Association  of  American  Pro- 
fessors; for  it  is  desirable  that  professional  in- 
terests shall  be  protected  by  the  profession  con- 
cerned. 

The  publications  in  bulletins  and  the  reports 
of  the  president,  Mr.  H.  S.  Pritchett,  consider 
a  range  of  problems,  in  which  naturally  an  ex- 
amination of  existing  pension  systems  in  educa- 
tional and  industrial  corporations,  private  and 
governmental,  domestic  and  foreign,  contributory 


PENSIONS  141 

and  non-contributory,  occupy  the  largest  space. 
Other  questions  considered  are:  the  financial 
status  of  the  professor,  the  state  and  national 
relations  to  education,  the  business  side  of  uni- 
versities, the  exchange  of  teachers,  educational 
legislation,  tuition  charges,  types  of  governing 
boards.  In  respect  to  these  the  foundation  has 
gathered  new  and  significant  data  and  has 
drawn  practical  conclusions,  indicating  the 
points  of  weakness  and  the  direction  of  practical 
and  desirable  progress.  Such  by-products  of 
American  education  as  sham  universities,  college 
advertising  and  college  catalogues  are  touched 
upon,  and  reveal  conditions  amusing  when  not 
too  discreditable.  At  times  the  reports  give  the 
impression  that  their  pages  are  used  as  a  medium 
of  personal  opinion;  it  would  be  better  to  dis- 
tinguish between  individual  and  official  state- 
ments and  to  avoid  the  appearance  of  an  im- 
perially benevolent  wisdom. 

Equally  prominent  is  the  account  of  the  ac- 
tivities of  the  foundation  and  of  the  inquiries 
incidental  to  them.  These  are  for  the  most  part 
germane  and  helpful,  though  too  commonly  dif- 
fuse and  in  the  form  of  controversy,  defense  and 
the  refutation  of  obviously  irrelevant  criticism. 
They  serve  to  show  how  many  and  various  are 
the  problems  which  the  foundation  has  had  to 
face,  once  it  decided  upon  the  proper  policy  of 
selection  of  the  institutions  and  the  qualifica- 
tions   for    acceptance.      Sectarian    institutions 

10 


142  CABNEGIE 

were  to  be  excluded ;  but  it  required  considerable 
investigation  to  determine  the  measure  of  re- 
striction in  view  of  the  many  kinds  and  degrees 
of  denominational  control.  To  determine  what 
is  and  what  is  not  a  college  required  examina- 
tion of  entrance  requirements,  college  courses, 
financial  support.  The  foundation  was  forced  to 
assume  the  responsibility  for  its  conclusions, 
however  unanticipated  their  bearing.  The  ex- 
amination has  been  painstaking,  and  important 
service  has  been  rendered  in  disclosing  the  issues 
and  the  divergences  of  theory  and  practise.  The 
point  of  danger  in  the  exercise  of  this  function 
is  that  of  bringing  undue  pressure  upon  an  in- 
stitution to  shape  its  course  toward  the  benefits 
of  the  foundation.  This  comes  back  to  the  fun- 
damental question  of  the  wisdom  of  the  policies 
of  the  foundation  and  the  quality  of  the  dis- 
crimination which  it  exercises.  Every  institu- 
tion is  free  to  choose  between  its  own  established 
traditions  and  the  qualification  for  benefit ;  jus- 
tice is  no  more  and  no  less  difficult  a  compro- 
mise in  this  than  in  many  other  practical  deci- 
sions. The  influence  of  the  foundation  remains ; 
it  sets  the  example  which  each  institution  may 
follow  in  its  own  manner. 

We  thus  reach  the  policies  of  the  foundation 
and  the  benefits  of  the  retiring  allowances  which 
its  funds  provide.  In  such  complex  social  pro- 
visions, practise  must  follow  the  clue  of  prin- 
ciple.    The  leading  principle  adopted  by  the 


PENSIONS  143 

foundation  is  reprinted  as  the  text  of  this  re- 
view. It  is  just  as  sound  now  as  it  was  ten  years 
ago;  if  it  has  been  forgotten  or  ignored  by  the 
foundation,  that  is  an  additional  reason  for  its 
restatement.  To  provide  relief  in  old  age  is  one 
matter;  to  strengthen  and  dignify  the  profes- 
sion of  teaching  is  quite  another.  The  provisions 
that  accomplish  the  latter  may  include  the 
former;  the  reverse  relation  does  not  hold.  As 
in  all  important  decisions,  the  critical  issue  is 
what  shall  be  first  and  what  second.  Honor 
places  one  rule  of  conduct  first,  and  expediency 
another,  as  the  world  knows  to  its  sorrow.  If 
the  principles  and  the  promises  of  the  founda- 
tion are  to  be  treated  after  ten  years  as  **a  scrap 
of  paper,'*  there  is  at  least  the  consolation  that 
no  specious  diplomatic  reason  may  be  urged  for 
maintaining  a  demoralizing  neutrality  of  opin- 
ion.   The  obligation  of  protest  is  imperative. 

The  original  position  is  clearly  stated.  In 
recognition  of  the  poor  reward  of  the  teaching 
profession,  the  retiring  allowance  is  established 
to  compensate  the  deficiency.  It  was  explicitly 
stated  that  a  retiring  allowance  as  a  charity 
would  be  unacceptable  and  **has  little  to  com- 
mend it.*' 

It  is  essential,  in  the  opinion  of  the  trustees,  that  the 
fund  shall  be  so  administered  as  to  appeal  to  the  pro- 
fessors in  American  and  Canadian  colleges  from  the 
standpoint  of  a  right,  not  from  that  of  charity,  to  the 
end  that  the  teacher  shall  receive  his  retiring  allowance 
on  exactly  the  same  basis  as  that  upon  which  he  receives 


144  CABNEGIE 

his  active  salary,  as  a  part  of  his  academic  compensation 
(Pritchett:  1906).  To  these  teachers  and  their  families 
the  pension  coming  unexpectedly  in  old  age  after  a  life 
in  which  no  adequate  provision  had  been  made  for  fail- 
ing activity  has  come  as  a  very  gracious  and  noble  char- 
ity, and  has  been  accepted  in  an  admirable  spirit 
(Pritchett:  1916). 

This  metamorphosis — one  of  several,  equally 
adroit — of  a  rightful  **part  of  [his]  academic 
compensation*'  into  *'a  very  gracious  and  noble 
charity'*  will  explain  the  difficulty  of  a  reviewer 
in  appraising  the  policies  of  the  foundation. 
With  principles  so  ephemeral  and  policies  main- 
tained by  an  agility  beyond  a  humble  academic 
capacity,  the  reviewer  may  pertinently  interject 
a  plea  for  indulgence  as  a  charity  if  not  as  a 
right. 

The  rules  of  retirement  applied  to  two  classes' : 
to  those  retiring  at  the  age  of  sixty-five ;  to  those 
retiring  after  twenty-five  years  of  service.  The 
allowance  for  the  latter  was  reduced  to  approxi- 
mate the  draft  upon  the  funds.  Disability  was 
separately  considered  and  provided  for.  Of  the 
two  provisions  the  second  more  distinctly  served 
to  strengthen  the  teaching  profession;  it  indi- 
cated that  the  foundation  sought  to  influence 
the  career  of  the  professor  while  in  command  of 
his  best  powers.  The  clearest  statement  by  Mr. 
Pritchett  of  the  value  of  this  provision  is  in  a 
published  letter  of  1908 : 

I  can  imagine  no  better  thing  for  an  institution  of 
learning  than  to  have  about  it  a  group  of  men  who  are 


PENSIONS  146 

en^&ged  in  active  research  and  who  are  not  burdened 
with  the  load  of  teaching  which  falls  to  most  American 
teachers. 

This  provision  **adds  much  to  the  value  of  the 
retiring  allowance  system";  there  are  teachers 
**to  whom  this  provision  will  be  specially  at- 
tractive." President  Jordan  as  a  trustee  of  the 
foundation  adds:  **the  retirement  of  men  in 
good  health  to  pursue  their  studies  unhampered 
may  be  regarded  as  one  of  the  most  important 
functions  of  the  Carnegie  Foundation."  So  de- 
cided was  the  original  emphasis  upon  reward 
and  encouragement  and  not  relief,  that  the  one 
relief  standing  closest  to  the  solicitude  of  the 
professors — ^that  of  provision  for  widows — ^was 
explained  as  of  a  different  type  and  made  dis- 
cretionary. 

In  all  cases,  the  granting  of  pensions  to  widows  of 
professors  stands  upon  a  different  basis  than  that  of  the 
retiring  allowances  to  professors. 

This  provision  was  clearly  an  error  of  judg- 
ment; and  in  1910  a  correction  was  made,  and 
the  widow's  allowance  was  rightly  placed  upon 
the  same  mandatory  basis  as  that  of  the  pro- 
fessor. An  allowance  for  a  widow  contingoit 
upon  the  favor  of  a  board  of  trustees  is  hardly 
a  consoling  provision ;  but  the  lack  of  judgment 
in  framing  it  may  be  excused,  if  it  was  due  to 
the  adherence  to  the  principle  of  direct  benefit 
to  the  active  professor.  The  retiring  allowance 
was  conceived  as  a  right;  to  ma^e  this  plain  the 


146  CABNEGIE 

initiative  in  the  matter  of  service-retirement 
rested  with  the  professor.  If  the  foundation 
had  continued  this  policy  and  used  the  funds  in 
accord  with  it,  and  had  assumed  no  obligations 
which  it  could  not  meet,  its  history  and  the  pres- 
ent task  would  have  presented  a  far  simpler  and 
pleasanter  aspect.  The  manner  of  its  abandon- 
ment introduces  the  critical  step^  in  the  history 

sin  considering  this  step  it  should  be  stated  clearly 
and  emphatically  that  the  wisdom  of  the  provision  for 
service-retirement  in  the  form  adopted  is  not  under  dis- 
cussion.  The  present  reviewer  is  convinced  that  the  pur- 
pose aimed  at  in  this  provision  is  the  most  important 
service  which  the  foundation  can  undertake.  He  is  not 
convinced  that  the  provision  was  as  well  framed  as  was 
possible,  but  was  content  to  accept  it  for  the  purpose 
which  it  emphasized.  The  best  criticism  of  the  entire 
plans  of  the  foundation  is  given  by  Professor  Cattell 
(SdeTice,  April  2,  1909),  who,  however,  questions  the 
value  of  annuities  and  their  dispensation  by  a  central 
institution.  His  contention  that  the  work  of  the  founda- 
tion should  have  been  confined  to  helping  selected  insti- 
tutions to  found  a  pension  system — each  for  itself  in 
general  conformity  to  a  minimum  requirement — ^is 
worthy  of  the  most  serious  consideration,  especially  in 
the  ligfht  of  recent  proposals.  An  equally  radical  objec- 
tion to  the  policies  of  the  foundation  (which  can  not  be 
discussed  on  the  present  occasion  apart  from  the  general 
reference  made  above)  questions  the  desirability  of  in- 
fluencing educational  policies  by  disinterested  examina- 
tion and  criticism  and  combining  with  it  the  interested 
offer  of  financial  support;  it  suggests  the  palm  of  re- 
ward, in  one  hand,  and  the  club  of  coercion  in  the  other. 
The  consideration  is  of  vital  importance;  the  danger  is 
real  and  its  avoidance  requires  that  wise  discretion  with- 
out which  rule  imposes  when  it  eliould  but  direct. 


PENSIONS  147 

of  the  foundation — the  indefensible  invasion  of 
protected  territory. 

The  service  pensions  were  abolished  in  1909- 
1910  without  warning  or  opportunity  for  discus- 
sion. The  manner  of  their  withdrawal  and  the 
reasons  assigned  made  a  bad  matter  indefinitely 
worse.  A  quotation  from  an  editorial  article  in 
the  New  York  Evening  Post  (February  28, 1910) 
sets  the  situation  in  its  proper  light. 

Dr.  Pritchett  says  that  **the  expectation  that  this 
rule  would  be  taken  advantage  of  almost  wholly  on  the 
ground  of  disabilities  has  proved  to  be  ill-founded''; 
but  if  this  is  meant  as  a  defense  against  the  charge  of 
want  of  good  faith,  it  betrays  a  misty  notion  of  the  na- 
ture of  moral  obligations.  If  disability  was  meant  to 
be  the  basis  fr(»n  the  banning,  nothing  would  have 
been  easier  than  to  say  so;  if  it  was  not,  then  it  was 
absolutely  honorable,  right  and  proper  for  any  man  to 
avail  himself  of  the  retiring  allowance  offered  him  with- 
out reference  to  question  of  disability.  ...  If  to  retire 
under  a  pension  is  to  mean  to  retire  under  a  censorship, 
the  Carnegie  Foundation  may  conduce  to  the  material 
comfort,  but  will  certainly  not  conduce  to  the  dignity  or 
self-respect  of  the  profession  of  university  teaching. 
And,  to  come  back  to  the  main  point,  the  homely  obli- 
gation of  fulfilling  in  a  reasonable  measure  substantial 
expectations  that  have  been  raised  by  one's  own  declared 
intentions  is  a  duty  antecedent  even  to  the  high  purposes 
to  which  the  Oamegie  Foundation  is  dedicated. 

The  aspersions  cast  by  Mr.  Pritchett  upon  the 
men  who  accepted  the  original  statement  in 
good  faith  is  a  sufficient  indication  of  the  spirit 
of  his  direction  of  the  affairs  of  the  foundation. 


148  CABNEGIE 

The  attempt  to  introduce  after  the  act  an  inter- 
pretation that  is  not  remotely  suggested  in  the 
original  statement,  comes  so  near  to  unmitigated 
duplicity  that  there  is  no  purpose  in  avoiding 
the  term ;  the  injury  and  the  insult  are  alike  in- 
defensible. But  the  actual  offense  is  even  worse. 
A  year  later  Mr.  Pritchett  has  nothing  to  say  of 
the  repudiation  other  than  this : 

The  experience  of  the  yeax  has  confirmed  in  the  judg- 
ment of  the  trustees  the  wisdom  and  essential  justice  of 
the  action  taken  a  year  ago. 

Upon  which  Professor  Cattell  {Science,  March 
3,  1911)  comments: 

Now  this  is  a  truly  remarkable,  indeed  an  almost  in- 
credible state  of  affairs.  The  present  writer  has  dis- 
cussed the  matter  with  some  two  hundred  university  pro- 
fessors in  the  course  of  the  past  year,  and  so  far  as  he 
remembers  not  a  single  one  of  them  regarded  the  action 
of  the  trustees  as  other  than  unwise  and  unjust. 

Such  disregard  of  actual  opinion  explains  the 
distrust  with  which  all  further  statements  em- 
anating from  this  source  have  been  received. 

The  record  of  the  foundation  up  to  the  mo- 
ment of  this  fateful  action  was  worthy  of  the 
respect  and  appreciation  which  it  received  on 
all  sides.  Opinions  differed  as  to  the  wisdom 
of  the  management;  criticisms  seemingly  over- 
critical  have  since  been  proven  pertinent,  even 
prophetic.  But  the  manner  of  repudiating  spe- 
cific obligations  left  a  sense  of  irritation  to  be 
added  to  the  fear  then  expressed,  that  a  foun- 


PENSIONS  149 

dation  with  no  more  conscience  than  to  abolish 
one  of  the  two  provisions  which  constituted  the 
practical  expression  of  its  purpose,  would  with 
equal  disregard  of  moral  or  legal  rights  abandon 
the  other.  In  1915-16  a  proposal  was  issued 
looking  to  the  complete  reversal  of  (nearly)  all 
its  policies. 

There  is  one  exception  to  the  rule  that  actions 
speak  louder  than  words.  The  manner  of  de- 
fense of  questionable  actions  often  reveals  a 
deeper  insight  into  motives  and  character.  (This, 
too,  the  world  has  learned  to  its  sorrow ;  the  de- 
fense of  atrocities  and  illegal  invasions  is  even 
more  shocking  to  the  moral  sense  than  the  dish 
regard  of  rights.)  The  fact  that  the  service- 
pension  ** right'*  was  curtailed  without  warn- 
ing, and  with  the  amazing  assumption  (if  sin- 
cere) or  the  arrogant  assumption  (if  a  doubt  or 
suspicion  of  the  opposite  remained),  that  the 
**  change  will  command  the  approval  of  the  great 
body  of  devoted  and  able  teachers,*'  is  illu- 
minated by  the  further  fact  that  there  is  no 
mention  of  financial  stress,  no  manner  of  admis- 
sion that  even  a  part  of  the  motive  for  abandon- 
ing a  provision  **that  adds  much  to  the  value  of 
the    retiring    allowance    system**     (Pritchett: 

1908)  is  the  imminent  stringency  of  funds.  No! 
the  reason  lies  wholly  with  the  professor  and  his 
moral  shortcomings.    The  professor  (of  the  year 

1909)  was  informed  that  the  rule  was  with- 
drawn to  protect  him  from  the  wiles  of  the  **ad- 


150  CABNEGIE 

ministration '^  which  might  force  him  out  against 
his  will,  or  use  this  power  to  interfere  with 
''academic  freedom"  and  ''academic  content- 
ment.'* Apart  from  this  benevolent  motive, 
there  is  also  "the  tendency  of  the  teacher  as- 
sured of  a  retiring  allowance  to  become  ultra- 
critical  toward  the  administration."  (And  a 
more  heinous  offense  the  academic  world  knows 
not ;  observe  the  propriety  with  which  the  pun- 
ishment fits  the  crime.)  The  confidence  of 
1908^  in  the  value  to  a  university  of  a  set  of 

3  The  discoveries  of  1912  make  the  matter  more  ex- 
plicit. By  employing  his  favorite  retrospective  periscope, 
Mr.  Pritchett  finds  that  **the  intention  was  in  fact  to 
use  the  rule  of  service  retirement  as  a  disability  pro- 
vision.'* To  put  it  mildly,  this  statement  deviates  from 
the  fact;  the  disability  provision  is  stated  distinctly  and 
separately  and  has  no  more  bearing  upon  service-retire- 
ment than  upon  age-retirement.  Since  Mr.  Pritchett  had 
so  many  good  reasons  for  abolishing  the  service-retire- 
ment it  was  unworthy  of  his  imagination  to  resort  to  a 
misstatement.  Since  teachers  do  not  rise  **  above  the 
appeal  of  self-interest"  and  since  ''after  a  few  years  of 
administration  it  was  perfectly  clear  that  the  rule  was 
doing  harm  rather  than  good, ' '  and  since  professors  as  a 
class  are  not  worth  pensioning  anyhow,  for  men  in  the 
early  fifties  were  applying  for  pensions  *'upon  trivial 
and  selfish  grounds"  (such  as  that  they  had  been  told 
it  was  honorable  to  accept  them),  why  seek  further? 
Here  is  the  net  issue :  * '  The  pensions  to  widows  have,  on 
the  whole,  seemed  to  bring  the  largest  measure  of  help 
and  comfort  with  the  smallest  possible  consequences  of 
an  undesirable  nature."  Of  professors,  as  of  Indians, 
it  is  true  that  the  only  good  (or  safe)  ones  are  dead 
ones. 


PENSIONS  151 

men  not  overburdened  by  teaching  has  proved 
an  illusion.  (Far  from  spending  his  time  profit- 
ably, the  retired  professor  was  presumably 
tempted  to  speculate  extravagantly  on  Wall 
Street  with  his  unearned  gains,  which  however 
he  received  "on  exactly  the  same  basis**  as  his 
active  salary.)  That  is  not  all.  **It  seems  that 
this  rule  offers  too  large  a  temptation  to  certain 
qualities  of  universal  human  nature.** 

(Qualities  so  universal  that  they  could  not  be 
anticipated  three  or  four  years  before,  and  so 
disreputable  that  they  can  not  be  further  spe- 
cified.) And  the  facts  (Report  of  1909)  are 
these :  that  of  forty  men  who  retired  on  the  serv- 
ice rule  as  many  as  twenty-eight  failed  to  be 
sufficiently  decrepit  and  senile  **to  strengthen 
the  teaching  profession.**  After  a  comprehen- 
sive study  of  the  situation  Mr.  Pritchett  mag- 
nanimously and  discriminatingly  concludes  that 
a  professor  retiring  upon  two  thousand  dollars 
at  the  age  of  sixty-five  (though  safer  a  few  years 
later  when  he  will  be  less  of  a  load  upon  the 
foundation)  is  fairly  immune  to  the  disastrous 
moral  effects  of  a  pension  (protection  from 
which  has  now  become  the  chief  solicitude  of  the 
foundation),  but  that  a  youth  of  fifty-nine 
(which  is  the  average  age  of  the  able-bodied  aca- 
demic criminals  who  retired  while  still  inade- 
quately incapacitated)  can  not  be  safely  trusted 
with  so  much  money  in  an  enforced  idleness 
(since  the  foundation  prohibits  any  measure  of 


152  CABNEGIE 

teaching  on  penalty  of  withdrawing  the  pen- 
sion). Three  long  years  of  "administrative  ex- 
perience'' (accidentally  coincident  with  the  dis- 
covery of  gross  financial  miscalculation)  proved 
that  it  was  a  mistake  to  promise  the  privilege; 
and  that  it  is  wise  and  just  (and  benevolent)  to 
remove  the  temptation,  thereby  again  strength- 
ening the  teaching  profession.* 

4 The  reception  of  this  reading  ''back  into  the  past 
intentions  of  the  foundation  its  present  purpose''  may 
be  judged  by  a  few  citations  from  a  letter  of  Professor 
Lovejoy  (Science,  March  18,  1910).  **The  president  of 
the  foundation  quotes  verbatim  the  original  service-pen- 
sion rule  (which  says  nothing  whatever  about  disability) 
and  immediately  adds  the  surprising  comment,  Hhe  sec- 
ond rule  thus  became  a  complex  one,  covering  service 
and  disability.'  (It  may  be  noted  that  the  word  'disa- 
bility' was  already  to  be  found  in  ordinary  English  dic- 
tionaries in  the  year  1906)."  The  fact  that  the  presi- 
dent "reflects  severely  upon  the  twenty-eight  persons 
who,  without  disability,  axjcepted  service  pensions" 
"certainly  affords  conclusive  evidence,  which  should  be 
pondered  by  professors  and  governing  boards  in  'ac- 
cepted institutions,'  that  the  apparently  plain  language 
of  the  foundation's  rules  gives  no  clue  whatever  as  to 
what  the  oflScials  of  the  foundation  may  subsequently 
announce  that  they  have  previously  been  anticipating." 
The  matter  of  becoming  "ultracrit^cal  toward  the  ad- 
ministration," "seems  to  mean,  if  it  means  anything 
either  that  an  important  proportion  of  the  members  of 
the  profession  are  kept  in  order  only  through  fear  of 
losing  their  positions,  and  that,  if  assured  of  an  inde- 
pendent competency,  they  would  forthwith  behave  in  an 
unreasonable  manner;  or  else  it  means  that,  whether  the 
criticism  that  might  proceed  from  professors  were  rea- 


PENSIONS  153 

The  embarrassment  of  the  reviewer  in  speak- 
ing of  any  policy  or  principle  of  the  foundation 
without  attaching  to  it  the  vintage-date  of  its 
maturing  is  thus  indicated.  In  the  years  1912 
to  1915  there  are  hints  of  the  approaching  dis- 
integration of  the  surviving  principles  of  the 
campaign  of  1909  to  1912.  As  the  margin  be- 
tween income  and  expenditure  shrank,  it  was 
found  that  the  age  of  sixty-five  was  too  low  for 
safe  and  proper  retirement ;  it  was  found  that  a 
contributory  pension  system  was  the  only  jus- 
tifiable one,  and  that  it  was  neither  to  the  ad- 
vantage of  society  nor  of  the  individual  that  a 
teacher  be  given  a  pension  at  the  most  pro- 
ductive period  of  his  life,  however  distinguished 
his  service,  unless  the  same  had  been  paid  for 
by  himself  under  a  fair  contributory  system. 
It  appears  that  it  is  not  the  income  and  the 
leisure  that  does  the  harm,  but  the  circum- 
stance that  (in  spite  of  the  fact  that  he  receives 
the  retiring  allowance  on  the  same  basis  as  his 
salary  (1906) — a  basis  that  in  1912  is  still  earned, 
still  a  right,  but  no  longer  quite  on  the  same 
basis  as  his  salary,  and  in  1916  is  a  full-fledged 

Bonable  or  not,  they  should  in  any  case  be  kept  silent  and 
subservient  by  a  mild  form  of  terrorism.  I  can  not 
think  that  the  publication,  by  a  person  holding  the  posi- 
tion of  the  president  of  the  Carnegie  Foundation,  of  such 
views  as  this  concerning  the  average  character  and  self- 
respect  and  the  proper  status  of  the  members  of  our 
profession,  is  likely  to  improve  the  public  standing  of 
that  prof ession. ' ' 


154  CABNEGIE 

charity),  he  has  not  paid  for  the  pension  di- 
rectly from  his  inadequate  salary.  But  the  re- 
viewer must  be  careful  to  distinguish  between 
the  conclusions  of  1912  and  those  of  1915-16. 

The  warrant  for  the  arbitrary  withdrawal  of 
the  service-pensions  is  alleged  to  reside  in  the 
reservation  that  the  trustees  by  a  two  thirds 
vote  may  modify  the  rules  of  retirement. 
"Whether  this  power  applies  to  the  withdrawal 
of  promised  benefits  can  be  decided  only  by  the 
courts;  such  legal  decisions  as  seem  pertinent 
indicate  that  no  such  power  is  included.  That 
the  withdrawal  was  illegal  as  applied  to  those 
who  had  established  a  just  expectation  can 
hardly  be  questioned ;  the  determination  of  such 
a  just  expectation  is  not  a  simple  matter.  But 
it  would  be  discreditable  to  the  high  purposes 
of  the  Carnegie  Foundation  to  ask  that  its  ac- 
tions be  judged  by  no  higher  obligation  than  a 
minimum  conformity  to  the  letter  of  the  law. 
There  may  have  been  available  just  procedures 
by  which  the  service  privilege  could  have  been 
withdrawn  and  the  established  rights  respected. 
These  were  not  employed.  A  gross  injustice  and 
a  serious  moral  violation  ajffect  the  action  as 
taken.  Misleading  representations  of  a  pecul- 
iarly offensive  type  were  used,  and  insult  added 
to  injury  by  impertinent  aspersions  and  a  jug- 
gling of  argument  which  merits  a  phrase  of 
Huxley 's :  *  *  copious  shuffling. '  *  On  these  counts 
the  foundation,  by  accepting  the  reports  of  its 


PENSIONS  155 

president,  stands  convicted."  The  verdict  is  im- 
portant in  view  of  the  measures  now  proposed 
and  pending. 

Writing  in  1911  with  prophetic  anticipation, 
Professor  Cattell  said: 

It  is  to  be  hoped  that  when  the  truateefl  of  the  founda- 
tion abandon  the  retiring  allowances  at  the  age  of  sixty- 
five  years,  they  will  do  so  in  a  manner  that  will  **  encour- 
age, uphold  and  dignify  the  profession  of  the  teacher  and 
the  cause  of  higher  education.'' 

The  overtures  of  Mr.  Pritchett  in  **A  Com- 
prehensive Plan  of  Insurance  and  Annuities  for 
College  Teachers"®    (1916)    propose  the  aban- 

8  Justice  requires  the  statement  that  the  trustees  who 
took  office  after  1910  should  be  exonerated  from  these 
charges;  their  names  may  be  found  by  comparing  the 
list  of  trustees  in  1910  with  the  later  lists.  While  it  lay 
in  their  power  to  raise  the  question  of  the  justice  of  the 
actions  of  their  predecessors  in  office,  the  difficulties  of 
such  a  step  are  obvious.  The  minority  of  the  board  who 
may  have  opposed  the  action  without  registering  a  pub- 
lic protest  are  entitled  to  like  consideration. 

«  The  principal  reversals  of  policy  contained  in  the 
''comprehensive  plan"  deserve  to  be  enumerated.  In 
1912  ''the  inauguration  of  a  compulsory  contributory 
plan  would  have  been  impossible  for  any  outside 
agency'';  in  1916  it  is  proposed  as  a  just  and  adequate 
solution  of  the  pension  problem  and  one  that  was  de- 
manded all  along  by  a  (until  1916  undiscovered)  social 
philosophy.  In  1912  it  was  not  fair  to  ask  the  professor 
to  contribute.  Moreover,  **An  insuperable  difficulty 
was  presented  by  the  form  of  the  gift  itself.  By  the 
terms  of  this  gift,  the  income  of  the  foundation  was  to 
be  ^>ent  in  providing  pensions  for  the  teachers  who  had 


156  CARNEGIE 

donment  of  the  age-retirement.  The  plan  will 
come  up  for  action  in  November;  the  issue  is 
critical.  The  action  to  be  taken  may  lead  to 
the  rehabilitation  of  the  foundation  under  dif- 
ferent management;  or  may  prove  to  be  the  oc- 
casion for  its  last  will  and  testament.  Profiting 
by  the  experience  of  1909,  the  trustees  voted  to 
submit  the  plan  to  all  professors  in  associated 

served  their  generation  unselfishly  upon  salaries  whieh 
made  provision  for  old  age  almost  impossible.  To  have 
l)egun  a  system  of  pensions  which  called  forth  at  once  an 
additional  expenditure  on  their  part  would  have  been 
repugnant  to  the  idea  of  the  endowment. '*  As  is  too 
familiar,  the  world  of  1912  was  a  very  different  one 
from  the  world  of  1916.  Insuperable  difficulties  have  be- 
come distinct  obligations  of  the  trustees;  the  same  sal- 
aries which  made  provisions  for  old  age  impossible  now 
make  them  ** readily  available*';  **the  idea  of  the  en- 
dowment'' is  so  elastic  that  what  is  repugnant  in  1912 
is  demanded  by  a  social  philosophy  eagerly  welcomed  by 
teachers  of  1916.  The  unselfish  service  of  1912  gives 
way  in  1916  to  the  sentiment  that  **the  possession  of  a 
pension  or  the  right  to  possess  one  .  .  .  tends  to  arouse 
that  selfish  conservatism  which  exists  in  greater  or  less 
measure  in  every  human  breast. ' '  Even  the  professor  is 
entitled  to  consolation;  he  may  find  it  in  the  fate  of 
Tommy  Atkins: 

Then  it's  Tommy  this,  an'  Tommy  that,  an'  "Tommy 
'ow's  yer  soul?" 

But  it's  '*Thim  red  line  of  'eroes,"  when  the  drums  be- 
gin to  roll. 

An'  it's  Tommy  this,  an*  Tommy  that,  an'  anything 
,    you  please; 

An'  Tommy  ain't  a  bloomin'  fool — ^you  bet  that  Tommy 
sees! 


PENSIONS  157 

institutions.  Disregarding  the  lessons  of  the 
past,  Mr.  Pritchett  presents  his  proposals  in  the 
same  objectionable  manner  that  characterizes 
his  past  utterances  when  creditable  reasons  must 
be  sought  for  conclusions  otherwise  determined 
— thus  calling  forth  the  caution  of  Professor 
Cattell : 

It  is  desirable  at  least  to  watch  the  Greeks,  both  when 
they  bear  gifts  and  when  they  take  them  away. 

There  is  the  same  copious  shuffling  of  the 
issues,  the  same  lack  of  frankness,  the  same  as- 
sumption of  benevolence  of  motive,  the  same  dis- 
regard of  accepted  principle  as  of  actual  opin- 
ion, the  same  aspersions  and  evasions.  There  is 
an  improvement  in  adroitness  and  plausibility, 
and  a  larger  use  of  the  method  of  presenting 
masses  of  sound  data  and  deductions  in  a  con- 
text that  invites  an  irrelevant  application.  The 
task  of  clearing  the  dust-heaps  and  presenting 
the  bare  issues  is  much  facilitated  by  the  pro- 
tests which  several  universities  have  registered 
against  the  plan. 

Writing  in  1909  of  the  repudiation  of  the 
promised  service-retirement.  Professor  Cattell 
said:  **This  action  would  be  incomprehensible 
if  it  were  based  on  the  grounds  alleged  by  the 
president  in  his  annual  report,  which  has  just 
now  been  printed.  He  does  not  even  remotely 
refer  to  the  financial  inability  of  the  foundation 
to  carry  out  the  obligations  it  had  assumed,  but 
11 


158  CABNEGIE 

bases  his  recommendations''  upon  the  bad  ef- 
fects of  the  provision.  In  the  present  instance 
the  admission  of  financial  difficulty  is  clear  but 
hardly  ample,  only  that  "any  pension  system 
resting  upon  a  fixed  endowment  must  inevitably 
reach  its  limit,  and  that  the  resources  of  the 
foundation,  and  any  addition  likely  to  be  made 
to  them,  would  provide  a  pension  system  in  only 
a  limited  number  of  institutions.''  The  first 
clause  does  not  suggest  a  petition  in  bankruptcy, 
and  the  second  is  a  fixed  (?)  principle  of  the 
foundation.  The  irritating  pretext  of  the  *  *  Com- 
prehensive Plan"^  is  that  **the  reason  for  the 
existence  of  such  a  report  lies  in  the  desire  to 
correct  the  weaknesses  of  the  present  system, 
etc."  A  frank  statement  would  place  the  rea- 
son in  the  admission  that  (owing  to  gross  mis- 
calculation)   the   foundation  can  not   continue 

^  The  plan  itself  is  simply  described.  It  withdraws 
the  age  pension  and  substitutes  a  contributory  (compul- 
sory) system  in  which  the  professor  and  the  institution 
each  pay  half  the  cost  of  such  combined  insurance  and 
of  annuity  after  age  sixty-five  as  each  professor  cares  to 
pay  for  between  certain  limits  (one  for  insurance  and 
another  for  annuity) ;  also  that  the  plan  may  include 
half  the  annuity  for  the  widow.  The  foundation  pays 
the  cost  of  maintenance,  guarantees  the  rate  of  interest 
and  provides  for  disability,  though  the  manner  of  such 
provision  requires  more  definite  statement.  The  insur- 
ance and  annuity  system  are  to  be  administered  by  a 
sub-agency  of  the  foundation,  in  which  the  contributors 
will  be  represented.  A  portion  of  every  annual  salary 
is  thus  retained  for  a  pension,  and  that  from  the  time 
of  the  first  academic  appointment. 


PENSIONS  159 

much  longer  the  age-retirements  as  promised, 
even  if  it  is  prepared  to  exhaust  principal  as 
well  as  income,  and  must  make  no  new  promises ; 
that  eventually  additions  to  its  resources  will  be 
required  to  meet  the  obligations  already  as- 
sumed; that  it  appeals  to  the  indulgence  of  its 
creditors,  and  asks  for  a  charitable  regard  of  its 
imprudence;  that  to  save  what  is  possible  from 
the  impending  disaster  requires  the  cooperation 
of  institutions  and  professors,  which  is  now  in- 
vited; and,  above  all,  that  the  plan  plainly  re- 
linquishes very  substantial  benefits  and  substi- 
tutes limited  though  still  desirable  ones.  It 
would  be  pertinent  to  add  that  the  type  of  benefit 
proposed  is  one  suitable  to  the  cooperation  of 
the  foundation,  but  the  management  of  which 
belongs  to  those  affected.  As  a  supplementary 
activity  of  the  foundation  it  has  much  to  com- 
mend it;  but  the  presentation  of  the  plan  as 
though  what  it  offers  is  a  more  comprehensive 
benefit  and  a  support  by  the  foundation  of  the 
associated  institutions  comparable  to  the  age- 
retirement,  is  misleading.  (That  it  should  ap- 
peal to  the  non-associated  institutions  with  no 
pension  system  of  their  own  is  intelligible.)  To 
make  a  virtue  of  a  necessity  may  be  a  wise  con- 
solation; to  present  the  necessity  of  restriction 
as  the  virtue  of  expansion  is  as  unwise  as  it  is 
unwarranted ;  it  is  not  even  tempered  by  the  ad- 
mission of  responsibility  for  the  necessity. 
To  consider  the  ** Comprehensive  Plan''  two 


160  CABNEGIE 

sets  of  data  are  needed,  and  neither  is  adequately 
supplied  ^y  Mr.  Pritchett.  The  one  is  the  extent 
of  the  existing  obligations  assumed  by  the  foun- 
dation under  the  age-retirement ;  the  other  is  the 
extent  of  the  benefit  offered  by  the  proposed 
plan  to  professors.  The  answer  to  the  first  ques- 
tion requires  an  interpretation  of  the  incurred 
obligation:  whether  it  applies  to  all  members  of 
the  faculties  of  the  associated  institutions,  who 
in  the  future  may  qualify  for  age-retirement,  or 
only  to  those  who  do  so  within  a  stated  period. 
Mr.  Pritchett's  statement  is  this: 

The  actuaries  have  suggested  that  men  below  the  age 
of  forty-five  years  could  to  their  own  advantage  transfer 
from  one  system  to  the  other.  Whether  twenty  years  is 
a  reasonable  notification  of  a  change  in  the  rule  is  a 
matter  which  will  be  considered  in  the  most  serious  and 
conscientious  manner  by  the  trustees. 

A  few  replies  from  leading  universities^  are 
available;  they  agree  that  the  obligation  exists 
toward  all  members  of  associated  institutions  ir- 
respective of  age.  The  phrase  **to  their  own  ad- 
vantage'* is  either  wholly  misleading,  or  it  im- 

8  The  universities  referred  to  are  Cornell,  Johns  Hop- 
kins, Princeton  and  Wisconsin;  others  may  have  replied 
or  still  propose  to  reply  to  the  same  purpose.  The 
** Comprehensive  Plan"  was  at  first  issued  with  the 
mark  *' Confidential, "  and  the  repli^  bore  the  same 
token.  When  the  plan  itself  was  made  public,  the  re- 
plies were  presumably  released;  both  are  intended  to 
affect  sentiment.  Permission  to  cite  the  replies  in  the 
present  survey  was  asked  and  granted. 


PENSIONS  161 

plies  that  financial  disaster  is  so  certain  that  men 
under  forty-five  may  already  read  on  the  doors 
of  the  foundation  the  warning:  **A11  hope  aban- 
don, ye  who  enter  here. '  * 

It  is  fortunate  that  the  replies  of  two  institu- 
tions afford  the  needed  data.  The  Cornell  reply 
is  a  model  of  precision  and  pertinence.  It  main- 
tains that  changes  in  the  system  should  apply 
only  to  those  who  become  instructors  in  asso- 
ciated universities  after  the  change  is  decided 
upon,  but  makes  its  calculations  on  the  basis  of 
obligations  to  those  over  forty-five  years  of  age. 
After  taking  into  acount  every  factor  that  is 
capable  of  reasonable  estimate,  the  conclusion  is 
reached  that  (extending  over  the  term  of  years 
of  the  lives  of  beneficiaries  pensionable  under 
the  limitations  stated)  a  sum  of  about  $25,000,- 
000  would  be  needed  and  used,  principal  and 
intereirt,  in  meeting  these  accrued  liabilities.* 
This  can  be  done  with  the  help  of  the  Carnegie 
Corporation;  such  a  solution  leaves  slight  mar- 
gin for  other  service  unless  a  financial  recon- 
struction is  arranged.  The  Cornell  reply  pro- 
poses: 

If  relief  from  the  burden  of  obligations  already  as- 
sumed can  be  secured,  the  foundation  ^ould  (a)  pay 
out  of  its  income,  under  rules  to  be  adopted,  disability 
annuities  to  such  teachers  in  associated  institutions  as 

•  The  sum  should  be  decreased  by  an  (uncertain)  al- 
lowance for  the  forfeiture  of  pension  by  emigration  to 
a  non-associated  institution. 


162  CABNEGIE 

have  purchased  and  are  continuing  annuity  contracts 
with  approved  insurance  companies  maturing  at  sixty- 
five  to  sixty-eight  years  of  age  and  of  $1,000  to  $4,000 
in  value,  such  disability  annuities  to  cease  when  the  disa- 
bility is  relieved  and  in  any  event  when  such  purchased 
annuities  respectively  become  payable;  and  (6)  dis- 
tribute annually  to  such  teachers  equally  the  balance  of 
its  income. 

The  several  protests  agree  that  a  wholly  com- 
pulsory system  is  neither  proper  nor  feasible; 
the  institutions  or  individuals  must  have  a  voice 
in  this  determination. 

The  Wisconsin  reply  with  equal  definiteness 
examines  and  reports  upon  the  value  to  benefi- 
ciaries of  the  ** comprehensive  plan''  and  con- 
cludes that  the  saving  to  professors,  as  com- 
pared with  prospects  and  opportunities  offered 
by  commercial  companies,  is  at  all  events  slight 
and  may  be  problematical.  The  data  are  too 
complex  for  summary.  The  foundation  is  prac- 
tically limiting  its  benefits  to  a  provision  for 
disability  (the  nature  of  which  is  not  fully 
stated)  and  for  which  the  Cornell  proposal  is  a 
substitute.  The  benefits  proposed — slight  or 
problematical  though  they  are — make  participa- 
tion by  the  institution  and  by  the  professor  com- 
pulsory. For  certain  state  institutions  this  will 
be  legally  impossible,  for  others  practically  so. 
Such  compulsion  sooner  or  later  places  the  whole 
burden  on  the  professor,  since  participation  by 
the  ini^itution  tends  to  react  against  advance  in 
salary.    The  complications  introduced  by  migra- 


PENSIONS  163 

tions  from  institutions  with  pension  systems  to 
those  without  them,  and  vice  versa,  will  be  dif- 
ficult to  meet.  The  plan  proposed  not  only  in- 
troduces a  different  system,  which  is  admitted, 
but  justifies  the  abandonment  of  the  original 
principle. 

So  long  as  the  income  is  used  [to  encourage  or  compel 
othersio]  to  pay  pensions  to  teachers  who  have  grown  old 
and  have  passed  the  period  of  usefulness  in  service,  or 
to  provide  pensions  for  teachers  who  after  long  service 
are  absolutely  broken  in  health,  or  for  the  widows  of 
such  men,  the  expenditure  does  good,  not  harm.  To  go 
beyond  this  is  to  tread  on  questionable  ground 
(Pritchett). 

10  The  added  words  are  inserted  to  apply  to  the  situa- 
tion if  or  when  the  *  *  CJomprehensive  Plan'*  is  adopted. 
They  are  not  needed  at  present. 

The  replies,  in  addition  to  giving  opinions  upon  the 
plan  proposed,  urge  important  considerations  which 
should  be  respected  at  this  critical  juncture.  The  points 
raised  may  be  summarized:  the  plan  as  a  whole  is  not 
feasible;  the  compulsory  feature  is  especially  objection- 
able; the  effect  will  be  to  throw  the  whole  support  upon 
the  professor;  the  obligation  toward  insurance  and 
toward  annuities  is  different;  the  disability  provision  is 
not  clearly  defined;  commercial  companies  and  individ- 
ual initiative  are  competent  to  supply  the  benefit  pro- 
posed; the  foundation  should  not  enter  an  uncertain 
field  already  well  occupied,  and  abandon  its  distinctive 
function;  the  policy  of  influencing  the  many  institutions 
through  the  few  should  be  maintained ;  there  should  be  a 
contract  between  the  professor  and  the  foundation;  the 
institutions  and  the  professor  should  participate  in  the 
management  of  the  foundation;  all  existing  liabilities 
should  be  met  without  discrimination;  a  partial  retire- 
ment should  be  inaugurated  as  an  optional  procedure. 


164  CABNEGIE 

It  is  certainly  most  Tinfortiinate  that  the 
financial  situation  should  so  dominate  past  and 
present  issues  as  to  confuse  where  it  does  not 
obscure  the  outlook ;  but  that  is  no  reason  what- 
ever for  the  abandonment  of  sound  principles. 
The  line  between  what  is  just  and  wise  and  what 
is  unjust  and  unwise  is  to  be  drawn  precisely 
along  the  boundary  that  divides  those  who  shape 
policy  to  principle  and  those  who  shape  principle 
to  policy.  Their  mutual  adjustment  is  the  re- 
curring problem  of  administration.  Apart  from 
the  question  of  meeting  obligations,  the  continu- 
ance of  the  foundation  upon  any  useful  career 
depends  upon  the  measure  of  its  return  to  the 
position  which  was  and  is  its  raison  d^etre.  In 
the  financial  situation  there  seems  no  other  re- 
source than  the  Carnegie  Corporation  to  which 
Mr.  Carnegie  has  conveyed  one-hundred-and- 
twenty-five  million  dollars  for  the  purpose  of 
using  the  income  (at  present  about  six  million 
dollars  annually)  for  the  increase  of  the  capitals 
of  the  five  great  benefactions  which  bear  Mr. 
Carnegie's  name.  It  is  fortunate  that  the  other 
participants  in  this  corporation  are  not  likely  to 
require  so  large  a  measure  of  support  as  to  pre- 
vent the  use  of  the  corporation  to  make  the  foun- 
dation solvent  for  a  sufficiently  long  period  to 
restore  and  shape  its  policy  toward  greatest 
benefit  to  the  teaching  profession.  The  full  and 
frank  admission  of  the  situation  is  imperative. 
There  must  be  no  shuffling,  though  there  may  be 


PENSIONS  165 

slight  interest  in  fixing  responsibility.  To  urge 
or  imply,  as  Mr.  Pritchett  does,  that  absence  of 
accurate  data  was  in  any  real  sense  the  cause  of 
the  discrepancy  between  fact  and  estimate  is  pre- 
posterous. It  is  true,  very  true,  that  more  is 
known  than  was  known  ten  years  ago  of  the  cost 
of  pensions,  and  much  of  the  increased  knowl- 
edge is  due  to  Mr.  Pritchett.  But  the  estimates 
went  wrong  not  by  rods,  but  by  miles ;  how  they 
were  obtained  or  who  made  them  is  not  dis- 
closed.^^   The  acceptance  of  responsibility  would 

11  Professor  Love  joy  points  out  that  the  estimate  in 
the  First  Report  of  the  Foundation  contains  **no  refer- 
ence to  the  all-important  factor  of  age-distribution," 
and  comments:  "It  would  be  hard  to  imagine  an  ac- 
tuarial error  more  glaring  or  more  easily  avoidable." 
He  adds:  **Thi8  error,  and  the  insufficiency  of  the 
foundation's  endowment  for  its  announced  intentions, 
were  clearly  pointed  out  by  Professor  Cattell  in  Science 
four  years  ago, '  *  that  is  in  1909.  Professor  Cattell  com- 
ments :  *  *  'nie  lack  of  foresight  and  expert  knowledge  dis- 
played by  the  president  and  trustees  of  the  foundation 
is  astounding."  There  is  little  evidence  that  these 
views,  which  have  proved  to  be  rather  dismally  prophetic, 
received  proper  attention  or  any  at  all.  To  have  it  im- 
plied that  the  trustees  knew  all  along  that  their  funds 
were  inadequate  and  that  they  stated  the  fact,  is  mis- 
leading. To  accuse  men  who  accepted  the  pensions  with- 
out the  claim  of  poverty,  of  lack  of  consideration  for 
their  less  fortunate  colleagues  is  unfair  and  peculiarly 
invidious  in  view  of  the  assurance  of  ample  funds  not 
only  in  the  First  Report  but  in  the  repetition  of  this 
assurance  when  the  state  universities  were  admitted  and 
Mr.  Carnegie  added  five  million  dollars  to  the  endowment 


166  CABNEGIE 

be  an  aid  in  restoring  confidence  in  future  prom- 
ises. It  is  clear  that  relief  from  financial  distress 
would  not  of  itself  restore  confidence  any  more 
than  it  would  confer  wisdom  or  integrity.  The 
Obstacles  that  Stand  in  the  way  of  the  wisest  ad- 
ministration are  plainly  moral  ones.  If  the 
foundation  can  escape  the  desire  to  control,  can 
avoid  the  temptation  of  justifying  actions  by 
specious  reasons,  can  freely  entertain  any  plan 
or  suggestion  conducive  to  its  true  function,  can 

for  this  purpose.  In  the  letter  of  gift  it  is  stated  that 
**  expert  calculation  shows  that  the  revenue  will  be 
ample*'  'Ho  provide  retiring  pensions  for  the  teachers 
of  universities,  colleges  and  technical  schools  in  our 
country,  Canada  and  Newfoundland";  and  in  Mr. 
Pritchett  's  words :  * '  It  may  therefore  be  safely  assumed 
that  while  the  income  of  the  foundation  is  sufficient  to 
carry  out  the  original  plan  of  the  founder,  it  is  not  suffi- 
cient to  extend  the  system  of  pensions,  at  least  at  first, 
beyond  the  scope  which  he  indicated  in  his  letter  of 
gift.''  In  1908  Mr.  Carnegie  wrote  to  Mr.  Pritchett:  **1 
understand  from  you  that  if  all  the  state  universitiea 
should  apply  and  be  admitted  five  millions  more  of  five 
per  cent,  bonds  would  be  required."  Under  the  rules 
then  operative  and  in  the  light  of  the  draughts  upon  the 
funds  then  secured,  these  statements  are  so  wide  of  the 
mark  that  if  increased  five-fold  they  would  still  be  ques- 
tionable in  a  twenty-year  prospect.  The  gross  nature  of 
the  miscalculation  as  well  as  the  responsibility  for  it 
should  be  clearly  noted.  Moreover  the  slur  upon  those 
who  accepted  pensions  without  the  plea  of  distress,  is 
another  instance  of  reading  implications  into  statements 
after  the  event.  Poverty,  like  disability,  is  shuffled  into 
the  requisite  justification  for  accepting  an  earned  pen- 
sion, as  relief  replaces  reward  in  the  conception. 


PENSIONS  167 

give  to  the  teaching  profession  the  full  partici- 
pation in  its  measures  that  the  trust  implies ;  if, 
in  brief,  the  attitude  and  perspective  of  obliga- 
tion are  firmly  fixed,  the  outlook,  however  dismal 
at  present,  holds  promise  for  the  future.  It  is 
for  this  reason  that  emphasis  must  be  placed 
upon  principle  and  that  the  proof  of  violation 
of  principle  is  demanded  in  convincing  meas- 
ure. No  mature  moral  sense  is  interested  in 
fault-finding  beyond  the  demonstration  of  guilt. 
The  constructive  program  of  the  foundation  is 
the  central  interest  of  this  review. 

What  should  the  foundation  have  done,  and 
what  can  it  do  to  carry  out  the  high  purpose  and 
distinctive  mission  which  it  accepted  under  fa- 
vorable auspices  ten  years  agoT  What  are  the 
conclusions  to  be  drawn  from  its  unfortunate 
history?  At  no  point  is  the  reviewer *s  respon- 
sibility more  exacting  than  in  the  attempt  to  an- 
swer these  final,  practical  and  comprehensive 
questions.  The  considerations  may  be  presented 
serially. 

1.  A  prompt  return  and  fixed  adherence  to 
first  principles  is  imperative.  Mr.  Pritchett's 
original  statement  is  pertinent  and  sound.  **In 
the  long  run,  men*s  personal  preference  for  the 
work  of  the  teacher  .  .  .  can  not  be  depended 
upon  to  secure  an  adequate  supply  of  the  best 
men.  This  fact  the  older  European  countries 
long  ago  recognized,  and  in  order  to  secure  for 
the  place  of  teacher  the  best  men,  they  have 


168  CABNEGIE 

sought  to  dignify  the  profession  of  teacher  by 
the  highest  social  and  official  honors;  and  they 
have  sought  in  addition  to  strengthen  it  by  larger 
financial  rewards."  And  inasmuch  as  **the  sal- 
aries of  the  teachers  can  not  be  made  equal  to 
those  of  outside  professions  this  reward  has 
come,  in  the  main,  by  the  establishment  of  a  sys- 
tem of  pensions.  ...  In  other  words,  the  first 
and  largest  ground  for  the  establishment  of 
systems  of  retiring  pensions  for  teachers  has 
been  found  in  a  wish  to  strengthen  the  teaching 
profession.'*  The  direct  bearing  of  this  conclu- 
sion is  that  the  retiring  allowance  shall  influence 
the  professor  in  his  career.  The  foundation  has 
insisted  upon  complete  retirement;  this  is  a 
serious  mistake.  As  Professor  Cattell  has  sug- 
gested, the  foundation  takes  away  half  a  man's 
salary  and  all  his  occupation ;  it  should  give  him 
all  his  salary  and  relieve  him  of  half  (the  bur- 
densome portion)  of  his  duties.  Naturally  the 
allowance  would  continue  (in  some  form)  for 
life,  in  view  of  the  fact  that  it  comes  as  a  right, 
earned  in  the  process  of  earning  the  salary ;  for 
the  salary  itself  is  but  a  means  of  support  to 
make  possible  the  devotion  to  the  intellectual 
life.  Neither  salaries  nor  pensions  should  be  con- 
sidered in  commercial  or  irrelevant  terms.  The 
question  of  the  best  provision  with  the  available 
resources  to  secure  the  ripest  fruits  of  individual 
attainment  between  the  ages  of  fifty  and  sixty- 
five  or  seventy  is  too  complex  to  be  included  in 


PENSIONS  169 

this  discussion.  The  vital  point  is  to  recognize 
that  here  above  all  lies  the  great  opportunity  of 
the  foundation  to  support  and  cooperate  with 
the  universities  in  remedying  the  most  glaring 
and  wasteful  defect  in  the  academic  economy. 
There  has  been  too  much  endowment  for  build- 
ings and  institutions  and  too  little  endowment 
for  men.  The  professor  is  inevitably  institution- 
alized ;  yet  institutions  are  but  opportunities  for 
the  right  men.  To  strengthen  the  teaching 
professions  means  to  influence  directly  the  pro- 
fessorial career.  The  provision  must  be  con- 
ceived in  a  far  larger  and  more  sympathetic 
spirit  than  appears  in  the  service-retirement 
rule,  which  was  acceptable  only  as  an  indica- 
tion of  the  recognition  of  a  need.  It  must  be 
administered  in  a  spirit  the  very  opposite  of  that 
which  has  obtained.  To  abandon  the  essential 
conception  because  the  mode  of  expressing  it 
was  inadequate  is  like  poisoning  a  patient  be- 
cause the  first  treatment  proved  unsuited  to 
the  case.  A  further  important  provision  must 
be  reinstated  from  the  original  rules;  that  of 
leaving  the  initiative  and  the  choice  of  time 
and  manner  of  retirement  with  the  individual." 

"  Since  the  time  and  manner  of  retirement  is  the 
point  of  emphasis,  the  First  Report  may  again  be  cited : 
''The  question  as  to  the  age  at  which  a  professor  shall 
retire  is  a  matter  entirely  between  him  and  the  institu- 
tion with  which  he  is  connected. ' '  It  was  tMs  provision 
of  the  twenty-five  year  service  retirement  that  proved  its 
pertinence;  for  it  allowed  one  to  retire  at  a  period  de- 


170  CARNEGIE 

Many  men  would  prefer  to  teach  in  full  service 
until  they  are  ready  to  retire  completely ;  others 

termined  by  the  complex  circumstances  of  the  case.  At 
the  same  time  the  absolute  prohibition  of  teaching  lim- 
ited the  manner  of  retirement,  while  a  part-time  ar- 
rangement would  have  given  the  desired  elasticity.  It 
thus  becomes  clear  that  when  the  service  retirement  was 
withdrawn  a  double  injury  was  done,  since  now  the 
foundation  insisted  that  the  professor  must  teach  until 
the  age  of  sixty-five.  As  the  result  of  persistent  appeal 
two  small  concessions  have  been  grudgingly  allowed. 
The  first  permitted  universities  to  retire  men  and  carry 
the  allowance  a  few  years  in  advance  of  the  retiring  age ; 
the  later  permitted  a  part-time  arrangement  without 
diminution  of  pension  at  age  of  sixty-five.  All  these  ar- 
rangements are  affected  by  the  same  drawback:  that  so 
few  men  can  afford  to  take  advantage  of  them.  It  is 
only  the  more  fortunate  who  can  live  adequately  upon  a 
diminished  income.  The  one  central  need  is  not  met. 
Professor  Hobbs  has  called  attention  to  the  importance 
of  early  and  partial  retirement  as  a  means  of  freshening 
the  profession;  he  rightly  asserts  that  a  man's  optimum 
teaching  period  is  limited,  while  the  type  of  intellectual 
service  that  he  can  best  perform  is  unprovided  for.  All 
arguments  point  to  the  importance  of  influencing  the 
careers  of  professors  and  not  merely  to  the  relief  of  old 
age.  It  is  also  worth  noting  that  the  qualification  for 
retirement  has  not  been  changed.  Twenty-five  years  of 
service  entitles  one  to  a  pension,  which  one  does  not  re- 
ceive until  the  age  of  sixty-five;  the  widow  receives  it  in 
case  of  the  professor 's  death.  Whether  a  professor  could 
claim  a  pension  if  he  changed  his  profession  after 
twenty-five  years  of  teaching  is  a  matter  that  only  the 
courts  can  decide.  Rules  can  not  be  changed  retroac- 
tively to  the  disadvantage  of  beneficiaries.  It  is  in  many 
ways  regrettable  that  the  legality  of  certain  of  the  foun- 
dation's  changes  has  not  been  tested  in  court. 


PENSIONS  171 

would  not.  The  system  should  be  elastic,  and  no 
undue  pressure  exerted  either  by  an  outside 
agency  or  the  university.  The  university  re- 
tains an  interest  and  a  right  to  maintain  its  in- 
struction at  the  proper  standard ;  but  retirement 
should  not  be  an  administrative  decision,  deter- 
mined by  administrative  interests.  Until  the 
funds  of  the  foundation  are  used  in  furtherance 
of  the  direct  strengthening  of  the  teaching  pro- 
fession by  providing  for  at  least  the  ripest  period 
of  scholarship  something  approaching  the  con- 
ditions under  which  many  European  professors 
spend  the  greater  portion  of  their  lives,  its  most 
significant  and  important  function  will  not  be 
exercised. 

2.  Hardly  second  in  importance  is  a  conclu- 
sion of  quite  different  bearing.  The  history  of 
the  decade  emphasizes  what  the  academic  world 
is  learning  slowly  in  many  directions:  the  dan- 
gers of  the  administrative  attitude  and  controL 
If  there  is  one  institution  above  all  in  which  aca- 
demic considerations  should  be  decisive,  the 
foundation  is  that  one.  The  funds  belong  to 
the  teaching  profession  and  should  be  adminis- 
tered by  the  profession  for  the  profession.  An 
external  board  of  trustees  is  an  anomaly.  The 
contention  that  a  board  composed  largely  of  col- 
lege presidents  is  not  external  in  the  sense  in 
which  a  lay  board  would  be,  is  just.  There 
should  be  college  presidents  upon  the  board  to 
represent  the  administrative  interests;  just  as 


172  CABNEGIE 

there  should  be  financiers  to  represent  the  finan- 
cial interests.  All  the  members  of  the  board 
should  hold  office  as  the  cfhoice  of  the  professors 
and  institutions  concerned.  It  is  a  great  satis- 
faction to  note  that  such  a  plan  of  government 
was  precisely  what  Mr.  Carnegie  provided.  The 
deed  of  gift  provides  that  each  participating  in- 
stitution shall  have  a  vote  in  the  election  of  trus- 
tees ;^^  this  vital  provision  was  set  aside  with  no 

13  There  is  a  strange  incident  in  the  history  of  the 
foundation  that  may  pertinently  be  recalled.  Early  in 
its  career,  yet  with  the  financial  uncertainty  already 
present  to  a  proper  foresight,  the  maximum  allowance 
was  increased  from  $3,000  to  $4,000.  This  increase 
could  affect  only  salaries  of  $5,300  to  $7,200  on  the  age 
basis,  and  of  $6,800  to  $9,200  on  the  service  basis  then  in 
operation.  Such  salaries  are  presidential  rather  than 
professorial;  it  would  be  interesting  to  know  what  pro- 
portion of  the  men  affected  by  the  change  participated 
in  the  extension  of  liberality.  The  incident  ds  thus  com- 
mented upon  by  Professor  Cattell:  **It  is  certainly  odd 
that  a  board  of  trustees  consisting  of  university  and  col- 
lege presidents  should  increase  the  maximum  pension 
from  $3,000  to  $4,000,  which  can  practically  only  be  of 
advantage  to  the  comparatively  high-salaried  president, 
and  should  retain  the  privilege  of  retiring  after  twenty- 
five  years,  when  this  ds  denied  to  the  professors  through 
the  financial  inability  of  the  foundation.  But  perhaps 
they  assume  that  higher  education  can  be  best  advanced 
by  retiring  the  president  whenever  possible."  The 
financial  inability  is  n^t  mentioned  by  Mr.  Pritchett,  but 
is  admitted  by  President  Jordan,  who  also  prints  the 
actual  resolution  which  was  adopted,  while  the  Eeport 
prints  the  resolution  in  a  form  containing  several  serious 
disagreements.      In   abolidiing   the   service-pension   the 


PENSIONS  173 

more  explanation  than  these  words:  **In  view  of 
the  desirability  of  a  permanent,  self -perpetuating 
governing  board,  the  provisions  of  this  para- 
graph'*  (which  provided  that  **each  institution 
participating  in  the  fund  shall  cast  one  vote  for 
trustees,**  the  trustees  to  serve  for  five  years 
and  be  eligible  for  reelection)  **were,  upon  the 
advice  and  with  the  consent  of  Mr.  Carnegie, 
omitted  from  the  act  of  incorporation  which 
forms  the  present  charter  of  the  foundation*' — 
and  by  this  step  autocratic  misrule  was  made 
possible.  It  is  in  many  ways  humiliating  that  a 
body  of  men  worthy  of  the  esteem  of  the  foun- 
dation to  the  extent  of  receiving  its  benefits, 
should  be  unrepresented  upon  the   governing 

executive  committee  was  instructed  to  ''aafeguard  the 
interests"  of  competent  professors  engaged  in  research, 
of  thoee  whose  service  included  service  as  a  college  presi- 
dent ;  and  of  those  expecting  benefits  in  1910.  The  reso- 
lution in  the  report  makes  of  the  first  a  **rare"  pro- 
fessor, repeats  the  second  with  the  assumption  that 
presidents  are  also  distinguished,  and  omits  the  third. 
A  few  years  later  this  unfortunate  discrimination  be- 
tween presidents  and  professors  was  withdrawn,  but  not 
before  it  became  known  (the  knowledge  pointing  to  a 
breach  of  confidence)  that  a  pension  applied  for  on  this 
groimd  had  been  refused  to  a  former  college  president 
then  entering  upon  a  campaign  for  high  political  office. 
In  1916  Mr.  Pritchett  is  prepared  to  admit  that  **it 
seems  doubtful  whether  the  change  was  desirable." 
The  question  recurs:  Would  errors  of  judgment  of  this 
nature,  which  so  soon  require  correction,  have  occurred 
if  professors  had  been  as  well  represented  upon  the  board 
as  were  presidents! 

13 


174  CABNEGIB 

board.  Mr.  Pritchett's  attention  has  been  called 
to  this  grave  defect,  but  without  avail.  If  every 
vacancy  that  has  arisen  in  the  board  had  been 
filled  by  electing  a  professor,  there  would  at 
least  have  been  evidence  of  a  democratic  inten- 
tion and  an  opportunity  for  the  presentation  of 
the  professorial  point  of  view.  Nothing  less 
than  a  majority  of  professors  upon  the  board 
and  a  control  by  the  professors  of  election  to  the 
board  will  be  a  permanently  satisfactory  ar- 
rangement. It  may  be  assumed  that  if  the  orig- 
inal provision  had  been  retained,  or  if  professors 
had  been  represented  upon  the  board,  the  serious 
errors  of  the  foundation  and  the  violation  of 
pledges  would  not  have  occurred. 

It  is  not  implied  that  professors — even  the 
select  ones  who  would  be  honored  by  their  col- 
leagues for  such  office — ^would  be  possessed  of 
greater  foresight  or  a  more  rigid  conception  of 
moral  obligation,  than  is  true  of  a  group  of  col- 
lege presidents.  It  is  implied  that  the  perspec- 
•  tive  of  interest  and  obligation  of  the  two  is  meas- 
urably different.  Under  ideal  conditions  this 
would  not  be  the  case;  under  actual  conditions 
it  is  the  case.  And  yet  it  is  not  easily  intel- 
ligible how  a  group  of  men  whose  positions  form 
a  richly  adequate  warrant  for  their  ability  and 
responsibility  have  come  to  acquiesce  in  a  series 
of  decisions  and  statements  that  have  estranged 
the  teaching  profession  from  an  institution  de- 
signed particularly  for  its  benefit.     The   dif- 


PENSIONS  175 

ficulty  must  lie  in  the  manner  of  direction  which 
**  offers  too  large  a  temptation  to  certain  qual- 
ities of  universal  human  nature,'*  which  may  be 
further  specified,  while  yet  denying  that  they 
are  universal.  College  presidents  are  exposed 
to  the  emphasis  of  administrative  decisions, 
which  under  pressure,  great  or  slight,  tend  to 
become  autocratic ;  they  are  under  temptation  to 
substitute  expediency  for  principle;  they  too 
commonly  drift  away  from  the  academic  point 
of  view;  in  the  present  relation  they  are  prone 
to  consider  benefit  to  the  institution  (in  relief  of 
financial  strain)  rather  than  provisions  for  men; 
appreciating  in  their  official  relations  the  value 
of  acquiescence  and  the  importance  of  leaving 
the  direction  of  affairs  to  those  in  official  posi- 
tions, they  may  lose  the  critical  sense  in  apply- 
ing this  policy  to  the  president  of  an  institution 
which  they  direct  and  who  also  shares  the  tradi- 
tions of  the  presidential  office.  If  such  consid- 
erations in  part  remove  the  burden  of  respon- 
sibility from  individuals,  they  place  it  the  more 
directly  upon  the  system  that  invites  such  ac- 
quiescence. The  personnel  of  the  board  con- 
tains men  who  may  confidently  be  counted  upon 
to  protect  academic  interests  and  who  might 
readily  owe  their  places  to  a  professorial  elec- 
tion. What  manner  of  protest  or  objection  they 
raised,  we  do  not  know;  the  majority  action 
stands.  One  may  be  assured  that  under  dif- 
ferent leadership  they  would  have  served  the 


176  CABNEGIE 

cause  of  education  as  faithfully  in  this  as  in 
other  relations. 

If  the  restoration  of  the  original  purpose  of 
the  foundation  can  be  brought  about  (and  in 
a  manner  suitable  to  actual  conditions  as  re- 
vealed in  the  last  ten  years),  and  if  professors 
can  be  given  a  directive  voice  in  all  future  de- 
cisions, there  is  reason  for  hope  that  the  mis- 
takes of  the  past  may  be  atoned  and  the  activi- 
ties of  the  foundation  shaped  to  a  permanently 
useful  function.  These  two  desiderata  stand 
conspicuously  in  the  foreground  of  the  present 
perspective.  Other  provisions  helpful  to  such  a 
consummation  should  not  be  overlooked.^* 

3.  The  question  of  financial  resources  and  of 
the  relations  of  funds  to  a  system  of  benefits 

i*It  is  no  more  pertinent  in  one  connection  than  in 
another  to  emphasize  that  fixity  of  policy  is  itself  of 
permanent  value.  The  foundation  should  determine  its 
policies  and  adhere  to  them.  The  uncertainty  incident 
to  frequent  change  undermines  confidence.  Changes  of 
the  order  involved  are  not  due  to  the  lessons  of  experi- 
ence (however  plausible  it  may  be  to  refer  them  to  such 
source) ;  they  indicate  an  original  lack  of  judgment  and 
foresight  or  a  too  ready  yielding  to  expediency,  and  in 
either  case  a  lax  hold  upon  the  loyalty  to  principles.  At 
all  events  the  changes  of  heart  would  be  more  convinc- 
ing if  the  reasons  assigned  for  the  changes  and  the 
changes  themselves  were  more  consistent.  Some  assur- 
ance of  a  relatively  permanent  policy  is  to  be  expected 
at  the  present  crisis.  The  First  Eeport  is,  as  usual,  clear 
and  correct:  retiring  allowances  were  to  be  voted  *'in 
accordance  with  a  fixed  set  of  rules  and  upon  a  fixed 
plan.  * ' 


PENSIONS  177 

must  be  considered  together.  The  policies  that 
hastened  the  period  of  financial  embarrassmenit 
were,  first  of  all,  the  admission  of  too  many  in- 
stitutions; secondly,  the  liberal  extension  of 
pensions  to  individuals  in  non-accredited  insti- 
tutions. The  motives  leading  to  the  latter  step 
were  wholly  commendable  from  the  point  of  view 
of  relief,  and  doubtless  a  wise  discrimination 
was  exercised  in  a  difiScult  apportionment.  Such 
grants  would  bring  home  to  a  considerable  num- 
ber of  institutions  the  importance  of  providing 
retiring  allowances.  It  is  merely  unfortunate 
that  the  purpose  could  not  be  thus  extended; 
between  definite  expectations  and  these  specially 
voted  benefits  there  can  be  no  question  of  pre- 
cedence. The  grants  to  individuals  outside  of 
accredited  institutions  have  been  withdrawn, 
and  were  withdrawn  frankly  for  financial 
reasons. 

The  remedy  for  the  error  of  admitting  insti- 
tutions too  freely  can  not  be  simple.  The  liabil- 
ities obtain  equally  among  the  seventy-three  in- 
stitutions, and  there  are  a  number  of  others  that 
have  qualified  or  are  about  to  do  so,  whose 
claims  can  not  be  denied  without  questionable  dis- 
tinctions. The  original  estimate  of  a  group  of 
one  hundred  to  one  hundred  and  twenty  institu- 
tions was  far  too  large;  forty  institutions  (in- 
cluding the  leading  state  universities)  would 
still  present  serious  but  perhaps  not  insoluble 
financial    difficulties,    and    would    be    a    large 


178  CABNEGIB 

enough  number  to  establish  the  practise  of  re- 
tiring allowances  and  to  influence  opinion.  It 
is  doubtful  whether  the  foundation  can  under- 
take more  than  this  under  any  program  within 
its  scope;  though  it  might  aid  in  the  establish- 
ment of  a  system  such  as  the  '*  Comprehensive 
Plan/'  for  institutions  not  on  its  associated  list. 
Clearly  the  actual  program  which  it  announced 
was  impossible  with  the  funds  available. 

That  its  impossibility  was  not  foreseen  at  the  outset 
hj  the  officials  of  the  foundation  is  amazing  (Love joy). 

The  foundation  definitely  adopted  the  policy 
of  influencing  the  many  through  the  few.  This 
is  well  stated  in  the  first  report  in  which  the 
force  of  example  is  emphasized;  it  is  restated  in 
later  reports.    In  1912  Mr.  Pritchett  said: 

I  think,  however,  that  it  is  clearly  admitted  by  all 
teachers  that  a  few  hundred  adequate  pensions  at  the 
service  of  teachers  is  far  better  than  some  thousands  of 
very  small  pensions.  .  .  .  The  trustees  have  felt  sure  that 
it  was  better  to  establish  a  fair  retiring  allowance  sys- 
tem in  a  limited  number  of  colleges  than  a  very  poor 
system  in  a  large  number. 

In  1916  one  of  the  chief  *' weaknesses"  of  the 
system  is  that  it  is  limited;  and  the  assurance 
has  become  a  question  **  whether  the  foundation 
shall  cooperate  in  a  system  of  pensions  avail- 
able to  the  great  body  of  teachers  or  whether  it 
shall,  on  the  other  hand,  pay  the  entire  cost  of 
retiring  pensions  for  a  comparatively  small 
group  of  teachers";  it  is  urged  as  a  reason  why 


PENSIONS  179 

the  foundation  can  not  ask  of  the  corporation 
adequate  aid  that  the  system  is  available  **to  a 
very  limited  number  of  institutions. ' '  Had  Mr. 
Pritehett  submitted  the  question  he  would  have 
found  little  support  for  his  change  of  view.  The 
Wisconsin  reply  emphasizes  the  fact  that  the 
indirect  benefit  is  greater  than  the  direct,  that 
the  support  of  strong  institutions  is  the  correct 
mode  of  influence,  while  Mr.  Pritehett 's  reports 
of  pension  provisions  stimulated  by  the  founda- 
tion is  certainly  gratifying. 

The  question  of  limitation  ia  fundamental 
and  is  the  critical  issue  which  fixes  the  financial 
program;  it  also  determines  the  equally  funda- 
mental question  of  cooperation.  All  this  was 
decided  in  1906.  The  embarrassment  results 
from  an  attempt  to  reverse  the  policy,  which 
confuses  the  essential  relations.  Cooperative 
plans  were  doubtless  considered  when  the  orig- 
inal system  was  adopted;  if  so,  they  were  re- 
jected. If  they  were  rejected  for  the  right  rea- 
sons, these  reasons  still  hold.  If  they  were  re- 
jected for  wrong  reasons,  the  mistake  should  be 
admitted  and  the  desirable  type  of  cooperation 
established.  One  can  not  but  suspect  that  the 
desire  for  control  played  a  part  in  the  decision; 
for  taxation  means  representation,  and  the  rep- 
resentative principle  was  extracted  from  the 
government  at  the  outset.  The  central  agency 
that  establishes  the  system  must  either  assume 
the  cost,  or  at  the  time  of  establishment  (which 


180  CABNEGIE 

means  for  each  institution  the  time  of  its  admis- 
sion) provide  for  such  cooperation  as  may  be 
demanded  and  accepted;  for  this  is  part  of  the 
contractual  nature  of  the  relation.  Though  it  is 
without  warrant  to  impose  cooperation  such  as 
the  ** Comprehensive  Plan"  proposes,  the  uni- 
versities in  their  effort  to  reinstate  the  founda- 
tion will  unquestionably  be  as  liberal  as  possible 
in  facilitating  the  consummation  in  which  they 
have  a  common  interest.  Institutions  and  pro- 
fessors must  demand  a  voice  in  the  conduct  of 
affairs,  and  not  be  misled  by  any  partial  control. 
It  is  out  of  the  que^ion  that  the  institution 
should  pay  half  the  cost  and  the  professor  the 
other  half  (in  the  end  the  professor  will  pay 
the  whole),  while  the  foundation  assumes  the 
incidental  fees  and  some  form  of  disability 
benefit.  Mr.  Pritchett's  sustained  admiration 
of  the  ** comprehensive  plan"  which  so  miracu- 
lously multiplies  the  loaves  and  fishes  is  hardly 
justified.  If  one  could  induce  two  benevolent 
agencies  jointly  to  pay  one's  bills,  living  on  one's 
salary  would  be  a  simple  accomplishment.  The 
role  of  residual  benefactor  is  an  agreeable  one, 
especially  if  it  retains  the  direction  of  the  bene- 
faction and  the  sense  of  providing  the  benefits 
paid  for  by  others.  The  consolation  that  the 
transfer  of  obligation  rests  upon  ^*a  true  social 
philosophy"  should  not  be  harshly  disturbed. 

It  is  hardly  to  be  expected  that  the  trustees 
will  determine  all  the  pending  issues  at  the  meet- 


PENSIONS  181 

ing  in  November ;  it  is  least  of  all  to  be  expected 
that  they  will  adopt  the  ** Comprehensive  Plan." 
They  may  be  expected  to  reach  decisions  affect- 
ing all  future  actions  and  policies.  Not  alone 
must  the  foundation  be  reconstructed  financially, 
but  it  must  regain  the  confidence  of  the  pro- 
fessors for  whose  benefit  it  exists.  Professor 
Lovejoy  wrote  in  1910: 

There  seems  grave  reason  to  conclude  that  it  is  time 
for  the  rank  and  file  of  the  teaching  body  to  demand 
that  the  management  of  the  Carnegie  Foundation  shall 
be  altered  in  whatever  manner  is  necessary  in  order  to 
protect  them  against  the  sort  of  deception  and  the  sort 
of  indignity  to  which  they  have  been  subjected  in  the  re- 
cent administration  of  this  potentially  beneficent  insti- 
tution. 

This  is  strong  language,  but  has  amply  re- 
ceived since  1910  what  measure  of  justification 
it  may  then  have  lacked.  It  is  too  much  to  ex- 
pect that  the  desirable  relations  of  the  founda- 
tion to  its  beneficiaries  can  be  restored  until  a 
distinct  indication  of  a  change  of  heart  and  mind 
appears.  Upon  the  successor  of  Mr.  Pritchett 
will  devolve  the  difficult  task  of  reconstruction. 
His  first  requirement  is  the  possession  of  the 
confidence  of  the  teaching  profession.  The  trus- 
tees should  realize — each  for  himself  and  col- 
lectively— that  at  present  no  such  confidence  ex- 
ists, and  that  in  its  place  there  exists  a  serious 
distrust  that  finds  its  justification  in  past  deeds 
and  words.    The  clearest  manifestation  that  the 


182  CABNEGIE 

trustees  could  give  of  their  desire  to  serve  the 
trust  which  is  committed  to  them  is  to  provide 
for  an  immediate  participation  (in  the  Novem- 
ber discussions)  of  duly  accredited  representa- 
tives of  the  teaching  profession;  the  natural 
medium  for  this  is  the  American  Association  of 
University  Professors.  They  should  provide 
for  a  permanent  representation  of  professors 
on  the  board.  Trustees  with  no  very  distinctive 
interests  to  represent  and  who  have  enjoyed  the 
office  for  ten  years  can  in  no  better  way  show 
their  appreciation  of  the  situation  and  their 
loyalty  to  the  teaching  profession  than  by  re^ 
signing  their  offices  (now  held  for  a  double  term 
according  to  the  first  plan)  to  such  professors 
as  may  be  nominated  by  representatives  of  the 
teaching  profession  and  elected  by  the  trustees. 
Such  a  proposal  is  neither  impractical  nor  pre- 
sumptuous ;  it  is  merely  a  return  to  the  original 
plan  and  the  original  principle. 

Crises^  as  current  comment  indicates,  bring 
forth  the  heroic  qualities  and  the  spirit  of  sac- 
rifice.   May  they  do  so  upon  this  occasion.^" 

15  While  the  reviewer  aims  to  present  opinion  as  ob- 
jectively as  the  outlook  which  he  commands  makes  pos- 
sible, the  individual  angle  as  well  as  the  personal  organ 
of  vision  determines  the  perspective.  He  may  be  per- 
mitted to  refer  to  the  evidence  of  his  good  will  toward 
the  foundation  and  its  officials  as  well  as  its  projects. 
When  the  foundation  was  inaugurated,  and  at  the  dis- 
tinctive stages  of  its  career,  he  wrote  editorially  and  over 
his  signature  in  high  commendation  of  its  projects  and 


PENSIONS  183 

with  a  siiioere  faith  in  its  mission.  In  connection  with 
a  plea  for  the  admission  of  the  state  universities  he  re- 
viewed the  general  purpose  of  the  foundation  (North 
American  Beview),  and  indicated  the  significance  of 
what  it  had  done  and  proposed.  The  task  now  imposed 
upon  him  is  not  sought,  nor  is  at  agreeable.  One  of  the 
chief  reasons  why  he  felt  it  incumbent  to  accept  the  ob- 
ligation is  that  he  could  refer  to  his  past  expressions  as 
evidence  of  an  original  good  will  and  high  opinion  of 
the  foundation  and  its  direction.  The  responsiblitj  he 
has  tried  to  share  by  citation  of  others'  views;  he  ac- 
cepts the  full  responsibility  for  the  opinions  and  conclu- 
sions expressed. 

Since  this  review  was  written,  the  ''comprehensive 
plan''  has  been  attacked  upon  its  actuarial  side,  and 
that  in  several  aspects.  To  one  of  these  criticisms  the 
secretary  of  the  Carnegie  Foundation  has  replied  in  a 
manner  which  implies  that  the  arrangements  for  adopt- 
ing the  plan  are  going  forward.  Such  a  procedure  would 
be  as  unfortunate  as  it  would  be  unjust.  The  importance 
of  arousing  the  professorial  sentiment  and  the  public 
interest  in  the  impending  issue  is  thus  emphasized. 


REPORT  OF  THE  COMMITTEE  OF  THE 
AMERICAN   ASSOCIATION    OF   UNI- 
VERSITY PROFESSORS  ON  PEN- 
SIONS AND  INSURANCE! 

In  March,  1916,  President  Pritchett  of  the 
Carnegie  Foundation  for  the  Advancement  of 
Teaching  submitted  to  the  teachers  and  the 
presidents  of  educational  institutions  associated 
with  the  foundation  a  report  entitled  *  *  Compre- 
hensive Plan  of  Insurance  and  Annuities  for 
College  Teachers/'  Teachers  in  associated  insti- 
tutions were  invited  to  submit  suggestions  and 
criticisms  with  respect  to  the  proposed  plan,  and 
the  report  itself  asked  the  cooperation  of  every 
teacher  and  president  in  the  associated  institu- 
tions in  determining  the  question  **  whether  the 
fundamental  principles  set  forth  in  the  report 
are  those  upon  which  sound  pension  administra- 
tion and  legislation  must  rest. ' '  This  invitation, 
as  well  as  the  fact  that  the  report  proposes  radi- 
cal changes  in  the  relationship  existing  between 
the  foundation  on  the  one  hand  and  the  asso- 
ciated institutions  on  the  other,  vitally  affecting 
all  university  teachers  in  the  United  States,  led 
to  the  appointment  of  this  committee  on  pensions 
and  insurance  to  investigate  and  report  upon 
the  proposals  contained  in  President  Pritchett 's 
report. 

1  Printed  in  School  and  Society,  December  2,  1916. 
184 


PENSIONS  186 

Without  attempting  to  state  in  detail  the  com- 
prehensive plan  of  insurance  and  annuities  for 
college  teachers,  it  may  be  said  briefly  that  in 
substance  the  plan  proposes: 

(a)  The  abandonment  of  the  plan  adopted  by 
the  foundation  ten  years  ago  of  providing  for 
teachers  in  accepted  institutions  a  retiring  al- 
lowance to  be  paid  during  life,  following  the  age 
of  retirement,  which  is  now  fixed  by  the  rules  of 
the  foundation  at  a  minimum  of  65  years.  The 
suggestion  is  made  that  since  the  adoption  of 
the  existing  plan  has  created  to  some  extent  the 
just  expectation  of  a  retiring  allowance  on  the 
part  of  teachers  in  accepted  institutions,  this  ex- 
pectation will  be  fully  met  in  the  case  of  all 
teachers  in  accepted  institutions  who  are  over  45 
years  of  age,  but  that  teachers  under  that  age 
may  profitably  transfer  to  the  proposed  plan  of 
insurance  and  annuities ;  and  there  is  an  intima- 
tion that  this  transfer  may  be  made  by  action  of 
the  foundation,  without  the  prior  assent  of  the 
individuals  affected. 

(&)  The  substitution  for  the  existing  plan  of 
the  proposed  comprehensive  plan  for  insurance 
of  college  teachers,  which  in  substance  is  a  plan 
for  insurance  for  college  teachers  until  age  65, 
combined  with  the  payment  of  annuities  to 
teachers  after  age  65,  or  to  their  widows  in  the 
event  of  their  death  after  reacftiing  that  age. 

(c)  The  establishment  of  a  plan  for  the  pay- 
ment of  disability  allowances,  defined  as  follows: 


186  CABNEGIE 

In  case  of  a  teacher  holding  a  contract  for  insurance 
and  annuity,  whose  health  completely  fails  after  a  serv- 
ice of  15  years  as  professor,  or  20  years  as  professor 
and  instructor,  the  foundation  would  at  its  own  cost  con- 
tinue to  pay  during  the  period  of  his  disability  the 
premiums  on  his  life  insurance  policy  and  also  a  mini- 
mum pension  of  $1,200  a  year. 

It  is  proposed  that  the  cost  of  insurance  and 
annuities  be  borne  one  half  by  the  teachers  them- 
selves and  one  half  by  the  educational  institu- 
tions to  which  the  teacher  is  attached,  and  that 
the  benefits  of  the  plan  be  extended  generally  to 
teachers  in  institutions  of  higher  learning  in  the 
United  States  and  Canada. 

The  contribution  of  the  Carnegie  Foundation 
to  the  proposed  plan  is  the  cost  of  administra- 
tion of  the  plan,  provided  the  surplus  from  in- 
surance and  annuity  funds  is  proved  insufficient 
for  that  purpose,  and  the  guarantee  of  an  inter- 
est return  upon  all  invested  insurance  and  an- 
nuity reserve  funds  of  4^  per  cent,  per  annum ; 
and  it  is  suggested  that  the  foundation  may  bear 
the  cost  of  the  disability  allowance  as  above  sug- 
gested. 

I 

It  will  be  observed  that  the  essential  element 
in  the  proposed  change  of  plan  is  the  transfer 
of  the  financial  burden  of  making  provision  for 
members  of  the  teaching  profession,  whether  by 
pension  or  otherwise,  from  the  foundation  to  the 
teachers  themselves  and  to  the  institutions  with 


PENSIONS  187 

which  they  are  associated,  and  that  so  far  as  the 
foundation  itself  makes  any  contribution  to  the 
proposed  comprehensive  plan,  that  contribution 
is  to  be  spread  out  over  so  large  an  area  as  to 
make  the  benefits  which  it  offers  to  any  individ- 
ual so  slight  as  to  be  almost  negligible. 

President  Pritchett's  report  makes  it  plain 
that  the  Carnegie  Foundation  has  not  sufficient 
financial  resources  to  enable  it  to  carry  indef- 
initely the  burden  of  the  system  which  it  has  es- 
tablished. Under  ordinary  conditions,  this 
might  be  deemed  a  sufficient  reason  for  aban- 
doning the  existing  plan  and  make  it  unneces- 
sary to  discuss  the  other  reasons  suggested  in  the 
report  for  proposing  such  action.  It  appears 
from  the  report,  however,  that  the  Carnegie  Cor- 
poration, an  institution  quite  distinct  from  the 
Carnegie  Foundation,  has  abundant  funds  which 
may  be  used  for  maintaining  the  existing  sys- 
tem, although  it  is  not  bound  to  make  such  use 
of  them.  Since,  therefore,  abandonment  of  the 
plan  may  not  be  a  financial  necessity,  and  as  the 
other  reasons  urged  for  its  abandonment  raise 
questions  which  are  fundamental  in  the  consid- 
eration of  any  plan  for  the  financial  benefit  of 
the  teaching  profession  other  than  by  direct  pay- 
ment of  salary,  it  is  desirable  that  we  should 
comment  upon  them  very  briefly. 

On  page  54  of  President  Pritchett's  report  he 
states  in  summary  form  his  reason  for  believing 
that  the  existing  pension  system  should  be  aban- 
doned, as  follows : 


188  CABNEGIE 

The  fundamental  defect  in  the  existing  pension  sys- 
tem lies  in  the  assumption  that  free  pensions  for  college 
teachers  would  be  permanently  justified.  In  the  light  of 
ten  years  of  experience  and  in  the  light  of  the  experi- 
ence of  European  pension  systems,  this  assumption  seems 
to  rest  upon  a  defective  social  philosophy.  No  perma- 
nent advantage  will  accrue  to  any  calling  or  any  profes- 
sion by  lifting  from  the  shoulders  of  its  members  a  load 
which  under  moral  and  economic  laws  they  ought  to 
bear. 

It  is  to  be  noted  that  in  reaching  this  conclu- 
sion emphasis  is  placed  on  the  argument  that  it 
is  the  ^^free'^  pension  which  is  based  on  a  de- 
fective social  philosophy,  for  elsewhere  in  his 
report  (page  12)  President  Pritehett  reaches 
the  conclusion  that  a  pension  system  for  the 
benefit  of  teachers  is  *  *  demanded  from  the  stand- 
point of  a  just  and  humane  social  philosophy. '  * 
He  enumerates  the  reasons  which  may  be  urged 
for  the  establishment  of  a  pension  system  for 
teaehers  as  follows  (pages  12,  13,  14) : 

1.  The  altruistic  character  of  the  teachers' 
profession. 

2.  The  poverty  of  the  teaching  profession. 

3.  That  a  pension  system  is  the  only  humane 
and  feasible  method  by  which  aged  and  worn- 
out  teachers  may  be  removed  from  the  service. 

4.  The  fact  that  college  and  university  teach- 
ers as  a  class  are  separated  from  the  usual  com- 
mercial avenues  of  investment. 

5.  That  college  teachers  constitute  a  group 
of  employees  in  the  economic  sense,  and  that  it 


PENSIONS  189 

is  practicable  to  unite  them  for  common  pro- 
tection. 

6.  That  the  maintenance  of  a  pension  system 
for  college  teachers  has  some  effect  in  bringing 
able  men  into  that  calling. 

While  President  Pritchett  repudiates  the  first 
two  of  these  reasons  as  offering  any  basis  for  a 
pension  system,  he  accepts  the  others  as  justify- 
ing and  requiring  **the  establishment  and  main- 
tenance of  a  pension  system  for  college  teach- 
ers** (page  15). 

While  some  of  these  reasons  have  at  various 
times  been  advanced  as  a  justification  for  the 
establishment  of  a  pension  system  for  college 
teachers,  it  may  fairly  be  said  that  they  do  not 
singly  or  collectively  state  the  reasons  which 
were  given,  either  by  Mr.  Carnegie  or  President 
Pritchett,  upon  the  establishment  of  the  Car- 
negie Foundation  system  of  pensions  ten  years 
ago.  The  reason  then  urged  for  the  establish- 
ment of  the  pension  system  was  that  by  its  es- 
tablishment the  cause  of  education  would  be 
aided  by  adding  in  substance  to  the  remunera- 
tion of  teachers  in  the  form  of  a  retiring  allow- 
ance. And  this  allowance  was  established  on 
the  theory  that,  since  it  was  in  effect  one  form 
of  remuneration,  it  was  giving  to  the  teacher 
something  that  he  was  entitled  to  receive,  thus 
adding  to  the  dignity  and  security  of  the  teach- 
ing profession  and  contributing  to  the  cause  of 
education. 
18 


190  CARNEGIE 

Mr.  Carnegie  in  his  letter  of  April  16, 1905,  in 
wMch  he  announced  to  the  first  board  of  trus- 
tees of  the  foundation  the  purpose  of  his  gen- 
erous gift,  opens  with  the  sentence : 

I  have  reached  the  conclusion  that  the  least  rewarded 
of  all  the  professions  is  that  of  the  teacher  in  our 
higher  educational  institutions. 

President  Pritchett  in  his  First  Report  said 
(page  1)  : 

It  had  for  a  long  time  prior  to  the  establishment  of 
this  foundation  been  evident  that  the  time  was  approach- 
ing when,  for  the  sake  of  education  no  less  than  of  the 
teacher,  the  remuneration  of  the  teacher's  calling  must 
be  increased. 

and  on  page  2, 

This  gift  to  higher  education  was  received  with  gen- 
eral approval.  It  was  universally  admitted  that  no  wiser 
attempt  could  have  been  made  to  aid  education  than  one 
that  sought  to  deal  in  a  wise  and  generous  way  with  the 
question  of  the  teacher's  financial  betterment. 

And  on  page  31 — referring  to  European  ex- 
perience it  is  said — 

And  inasmuch  as  the  salaries  of  the  teachers  can  not 
be  made  equal  to  those  of  outside  professions,  this  re- 
ward has  come,  in  the  main,  by  the  establishment  of  a 
system  of  pensions  to  be  paid  to  the  professors  them- 
selves, to  their  widows  and  their  orphans.  In  other 
words,  the  first  and  the  largest  ground  for  the  establish- 
ment of  systems  of  retiring  pensions  for  teachers  has 
been  found  in  the  wish  to  strengthen  the  profession  of 
the  teacher. 


TENSIONS  191 

On  page  37,  it  is  said : 

It  is  true  that  the  real  teacher  finds  in  the  joy  of 
teaching  his  chief  reward.  The  same  thing  is  true  of 
the  highest  class  of  men  in  any  profession;  but  it  is  also 
true  that  as  the  rewards  and  the  honors  of  a  profession 
increase,  it  will  become  more  attractive  to  men  of  ability, 
strength  and  initiative.  In  other  words,  the  chief  value 
of  the  establishment  of  a  system  of  retiring  allowances 
to  the  teacher  in  the  higher  institutions  consists  in  the 
lifting  of  this  uncertainty  regarding  old  age  or  disability, 
in  the  consequent  lightening  of  the  load  of  anxiety,  and 
in  the  increasing  attractiveness  of  the  professor's  life 
to  an  ambitious  and  enlightened  man.  All  this  tends  to 
social  dignity  and  stability. 

And  in  answer  to  the  question  **How  this  fund 
may  be  so  used  as  ...  to  strengthen  the  gen- 
eral interests  of  education?"  President  Prit- 
chett  says  (page  37) : 

With  regard  to  the  second  question,  it  is  evident  to  the 
trustees  that,  to  better  the  profession  of  the  teacher  and 
to  attract  into  it  increasing  numbers  of  strong  men,  it 
is  necessary  that  the  retiring  allowance  should  come  as 
a  matter  of  right,  not  as  a  charity.  ...  It  is  essential 
in  the  opinion  of  the  trustees  that  the  fund  shall  be  so 
administered  as  to  appeal  to  the  professors  in  American 
and  Canadian  colleges  from  the  standpoint  of  a  right, 
not  from  that  of  charity,  to  the  end  that  the  teacher 
shall  receive  his  retiring  allorvrance  on  exactly  the  same 
basis  as  that  upon  which  he  receives  his  active  salary, 
as  a  part  of  his  academic  compensation. 

It  is  upon  these  two  fundamental  principles  that  the 
trustees  and  the  executive  committee  have  sought  to 
build;  and  their  whole  effort  has  had  for  its  aim  the 
establishonent  in  America,  ludng  that  term  in  its  widest 


192  CABNEGIE 

sense,  of  the  principle  of  the  retiring  allowance  in  in- 
stitutions of  higher  learning,  upon  such  a  basis  that  it 
msLj  come  to  the  professor  as  a  right,  not  a  charity. 

In  the  Second  Annual  Report  of  the  Founda- 
tion, in  a  chapter  entitled  *  *  The  Carnegie  Foun- 
dation, Not  a  Charity  but  an  Educational 
Agency,"  it  is  stated  (page  64) :  *'that  the  re- 
tiring allowance  must  come  as  a  right  not  as  a 
charity;  a  thing  earned  in  the  regular  course  of 
service,  not  a  charity. ' ' 

It  would  be  easy  to  multiply  quotations  from 
the  annual  reports  of  the  Carnegie  Foundation 
to  show  that  the  original  conception  of  the  pen- 
sion plan  adopted  by  the  foundation  took  very 
little  account  of  the  reasons  which  President  Prit- 
chett's  report  now  states  justify  and  require  the 
establishment  of  a  pension  system — see  **  Com- 
prehensive Plan  of  Insurance  and  Annuities" 
(page  15).  Its  principal  aim,  clearly  and  re- 
peatedly enunciated,  was  to  promote  the  cause 
of  education  by  increasing  the  security,  the  dig- 
nity and  the  economic  attractiveness  of  the 
scholar's  calling,  through  the  addition  of  cer- 
tain forms  of  deferred  salary  to  the  teacher's 
eventual  compensation.  And  this,  so  far  as 
known  to  the  teaching  profession,  has  continued 
to  be  its  aim  until  the  publication  of  the  *  ^  Com- 
prehensive Plan  for  Insurance  and  Annuities 
for  College  Teachers. ' ' 

The  plan  for  retiring  allowances  thus  con- 
ceived was  put  into  operation.    The  teachers  in 


PENSIONS  193 

accepted  institutions  and  the  educational  world 
in  general  have  accepted  it  in  the  spirit  in  which 
it  was  created.  The  Carnegie  pension  has  not 
been  regarded  as  a  charity,  the  recipient  of  it  has 
had  no  thought  that  he  was  receiving  something 
for  which  he  had  given  nothing.  He  has  felt  no 
embarrassment  in  receiving  it,  even  though  he 
might  possess  independent  means. 

It  has  remained  for  President  Pritchett  in 
1916  to  inform  the  recipients  of  the  Carnegie 
pension  that  the  pension  is  a  **very  gracious  and 
noble  charity''  (page  54)  and  on  page  56  of  his 
report  he  states  that  the  payment  of  a  pension 
under  such  circumstances  is  an  **  embarrassing 
use  of  trust  funds. ' '  This  can  be  the  case  only 
when  the  original  purposes  of  the  pension  sys- 
tem established  by  the  foundation  are  completely 
lost  sight  of. 

If  the  Carnegie  pension  is  a  form  of  compen- 
sation, as  it  was  intended  to  be  at  the  time  of 
its  establishment,  and  as  we  believe  President 
Pritchett  establishes  that  it  is  or  tends  to  become 
in  his  discussion  of  the  topic  **Are  pensions 
wages f  (page  34  of  the  report),  then  the  only 
substantial  social  or  economic  question  requiring 
to  be  answered  in  determining  the  desirability  of 
the  existing  pension  system  is  whether  the  Amer- 
ican college  teacher  in  receiving  a  Carnegie  pen- 
sion is  receiving  excessive  compensation. 

This  was  emphatically  answered  in  the  nega- 
tive by  the  founder  and  by  all  those  who  were 


194  CABNEGIE 

associated  in  the  work  of  establishing  the  exist- 
ing system,  and  we  do  not  believe  that  the  ques- 
tion is  one  which  now  merits  serious  debate  or 
would  receive  any  different  answer  if  its  consid- 
eration were  dissociated  from  the  immediate 
financial  problem  of  the  foundation. 

The  fact  that  this  compensation  in  the  form 
of  a  pension  is  not  received  directly  from  the 
educational  institution  to  which  the  teacher  is 
attached  does  not  appear  to  us  to  alter  the  case. 
The  compensation  of  the  teacher,  whether  paid 
by  his  college  or  university  or  by  the  Carnegie 
Foundation,  has  its  ultimate  source  in  benev- 
olence, at  least  in  the  case  of  all  institutions 
which  do  not  receive  state  aid.  A  pension  con- 
tributed to  by  the  university  whose  only  source 
of  funds  is  private  benevolence  is  a  ^^free'*  pen- 
sion to  the  same — ^but  no  greater — extent  as  if 
the  contribution  were  made  by  the  Carnegie 
Foundation  or  any  other  benevolent  institution. 
The  proposed  change  of  plan,  therefore,  in  so 
far  as  it  shifts  the  burden  of  providing  a  pension 
allowance,  or  annuity  to  the  colleges  or  univer- 
sities, does  not  appear  to  us  to  be  based  upon  an 
essentially  different  social  philosophy  from  that 
on  which  the  existing  system  of  Carnegie  pen- 
sions is  now  based,  and,  in  so  far  as  it  transfers 
the  burden  to  the  individual  instructors,  it  ap- 
pears to  us  to  be  in  effect  a  reduction  of  the  com- 
pensation to  which  they  have  heretofore  justly 
regarded  themselves  as  entitled,  in  the  form  of  a 
pension  **as  a  right,  not  a  charity.'* 


PENSIONS  195 

We  believe  that  the  original  conception  of  the 
pension  system  adopted  by  the  Carnegie  Foun- 
dation, as  an  aid  to  education  through  the  in- 
crease of  compensation  to  the  teacher,  was  based 
upon  sound  social  and  economic  principles.  It 
would  not  have  been  essentially  different  in  prin- 
ciple had  the  Carnegie  Foundation  made  addi- 
tions to  the  permanent  endowment  of  the  sev- 
eral accepted  institutions  for  the  purpose  of  in- 
creasing salaries,  except  that  by  effecting  the  in- 
crease through  the  medium  of  the  pension  it  re- 
lieved its  beneficiaries  from  the  burden  of  in- 
vesting the  salary  increase,  a  burden  which  as  a 
class  they  are  relatively  unfitted  to  bear.  Nor 
do  we  find  in  President  Pritchett's  report  any 
convincing  evidence  that  the  existing  pension 
system  is  based  on  a  defective  social  philosophy, 
or  that  if  continued  it  will  not  realize  its  pur- 
pose, or  that  it  ought  to  be  abandoned  for  any 
reason  except  inability  to  provide  adequate 
funds  for  its  maintenance. 

If  financial  exigencies  necessitate  a  modifica- 
tion of  the  existing  plan  so  as  to  require  coopera- 
tion and  voluntary  contribution  to  it  by  teachers, 
in  order  to  ensure  the  continuance  of  its  benefits, 
then  we  are  of  the  opinion  that  the  contribution 
by  the  foundation  should  be  so  substantial  that 
such  benefits  would  not  lose  their  present  char- 
acter as  a  means  for  improving  the  status  of  the 
profession  by  sensibly  increasing  the  rewards 
that  it  offers;  and  that,  so  far  as  possible,  the 


196  CABNEGIE 

original   aim  and  purpose   of  the  foundation 
should  be  adhered  to. 

II 

A  suggestion  made  in  President  Pritchett's 
report  which  immediately  concerns  all  of  the 
teachers  in  accepted  institutions  is  the  proposal 
that  teachers  under  45  years  of  age  should  not 
be  included  in  the  benefits  of  the  existing  pen^ 
sion  system.  That  the  trustees  of  the  founda- 
tion clearly  recognize  that  the  foundation  is 
under  moral  obligation  to  the  teachers  in  ac- 
cepted institutions  appears  from  their  resolu- 
tion of  November  17, 1915,  **That  whatever  plan 
is  finally  adopted  will  be  devised  with  scrupulous 
regard  to  the  privileges  and  expectations  which 
have  been  created  under  existing  rules''  (page 
VIII).  It  becomes  important  at  the  outset, 
therefore,  to  inquire  whether  the  proposed  cur- 
tailing of  those  privileges  and  expectations  is 
necessitated  by  financial  inability  to  meet  them, 
and  if  not,  whether  there  is  any  moral  justifica- 
tion for  the  discrimination  against  teachers  in 
accepted  institutions  under  45  years  of  age.  "We 
were  encouraged  to  believe  that  such  necessity 
did  not  exist  by  the  statement  (page  81) : 

Mr.  Carnegie  has  placed  behind  the  institution  he  has 
founded  [The  Carnegie  Foundation]  a  great  corporation 
[The  Carnegie  Corporation]  with  an  income  far  beyond 
the  load  which  would  be  imposed  by  the  present  pension 
system. 


PENSIONS  197 

In  order,  however,  that  a  clear  understanding 
might  be  readied  on  this  point  this  committee, 
through  its  chairman,  made  inquiry  of  President 
Pritchett  whether  such  necessity  did  in  fact  ex- 
ist. To  this  inquiry  President  Pritchett  has  re- 
plied, suggesting  a  gradual  increase  in  the  age 
of  retirement  from  65  to  68,  and  saying: 

With  this  change  in  the  nilea  th«  trustees  m&j  then 
fairly  ask  the  Carnegie  Corporation  for  its  support  in 
inaugurating  the  new  system,  and  in  maintaining  the  old 
one  for  all  teachers  now  in  the  associated  colleges,  leav- 
ing to  every  teacher  the  option  as  to  whether  he  would 
remain  in  the  old  system  or  enter  the  new. 

(Copies  of  the  correspondence  with  President 
Pritchett  are  printed  in  an  appendix.)  While 
this  does  not  answer  definitely  the  inquiry 
whether  there  is  financial  necessity  for  exclu- 
ding any  teacher  in  an  accepted  institution,  what- 
ever his  period  of  service,  from  the  benefits  of 
the  existing  system,  we  interpret  President  Prit- 
chett's  answer  as  an  assurance  that  there  are 
sufficient  funds  available,  through  the  aid  which 
the  Carnegie  Corporation  may  extend  to  the 
Carnegie  Foundation,  to  meet  the  expectations 
of  all  teachers  in  accepted  institutions,  regard- 
less of  age,  if  such  expectations  are  deemed  to 
rest  on  a  moral  obligation  of  the  Carnegie  Foun- 
dation. If  it  should  be  found  that  the  financial 
resources  of  the  foundation  and  the  funds  which 
may  be  availed  of  by  it  are  insufficient  for  this 
purpose,  then,  of  the  various  suggestions  which 


198  CABNEGIE 

have  been  made  for  reducing  the  benefits  of  the 
existing  system,  we  regard  a  gradual  change  in 
the  minimum  age  of  retirement  as  perhaps  least 
objectionable.^ 

That,  however,  such  moral  obligation  exists  is 
not,  in  our  opinion,  open  to  serious  debate.  It 
is  the  common  observation  of  every  man  of  ex- 
perience in  the  teaching  profession  that  the  ex- 
pectation of  a  retiring  allowance  is  an  important 
factor  with  many  a  teacher,  not  only  in  the 
choice  of  the  profession,  but,  in  many  instances, 
in  his  choice  of  the  institution  in  which  he  will 
practise  that  profession. 

There  are  few  men  in  administrative  positions 
in  our  colleges  and  universities  who  can  not  re- 
call cases  of  young  men  who  have  given  up  more 
lucrative  professions  to  adopt  the  calling  of  the 
teacher,  and  have  been  influenced  in  doing  so, 
in  part  at  least,  by  the  expectation  that  they 
would  be  entitled  to  the  retiring  allowance. 

In  the  first  annual  report  of  the  foundation  it 
was  stated  (page  37)  that  one  of  the  principal 
ends  to  be  realized  by  the  pension  system  was 
the  attraction  of  strong  men  into  the  teaching 
profession.  In  the  report  for  1912  (page  86) 
it  was  stated  that  the  pension  system  *  *  will  have 

^  TMs  statement  does  not  imply  an  approval  of  such 
a  step,  by  the  members  of  this  committee,  or  the  en- 
dorsement of  any  policy  looking  to  an  advance  in  the 
minimum  age  of  retirement.  Such  proposal  is  not  made 
in  the  comprehensive  plan  and  is  open  to  serious  objec- 
tions. 


PENSIONS  199 

its  influence  in  inducing  men  to  remain  perma- 
nently in  the  teaching  profession,"  and  in  the 
present  report,  President  Pritchett  comments  on 
the  fact  (page  34  and  page  54)  that  the  prospect 
of  a  pension  is  held  out  as  an  inducement  to 
teachers  to  accept  positions  in  associated  insti- 
tutions, and  properly  so,  we  may  add,  since,  as 
we  have  already  pointed  out,  the  original  concep- 
tion of  the  pension  system  was  that  it  was  a  form 
of  additional  compensation  to  the  teacher. 

Moreover,  it  is  undoubtedly  a  fact  that  many 
teachers  under  45  years  of  age  have  already 
made  provision  for  life  insurance  of  such  char- 
acter that  it  would  be  impossible  for  them  to 
transfer  to  any  other  system  without  financial 
loss ;  while  others,  in  expectation  of  the  promised 
pensions,  have  failed  to  make  provision  for  their 
old  age,  and  can  now  make  such  provision,  if  at 
all,  only  by  serious  financial  sacrifice.  As  Presi- 
dent Pritchett  points  out  in  his  report,  **The 
man  of  30  who  looks  forward  over  an  interval  of 
35  years*'  to  the  acceptance  of  a  pension  **will 
pay  for  it  in  one  way  or  another  before  he  re- 
ceives it.'*  If  pensions  are  wages,  or  if  an  in- 
structor **at  $1,500  a  year  who  is  offered  $1,800 
to  go  to  another  college  is  induced  to  remain 
where  he  is  under  the  expectation  of  a  pension 
30  years  later,  not  realizing  that  the  difference 
in  salary  will  pay  for  the  pension  several  times 
over,*'  then  teachers  in  accepted  institutions 
have  been  paying  for  their  prospective  pensions, 


200  CABNEGIE 

of  which  it  is  now  proposed  they  shall  be  de- 
prived. 

But  the  question  of  moral  right  is  not  one  af- 
fecting individuals  alone ;  it  affects  the  accepted 
institutions.  All  of  them  have  consciously 
shaped  their  policy  in  relation  to  employment, 
compensation  and  retirement  of  teachers  with 
definite  reference  to  the  pension  system  of  the 
Carnegie  Foundation.  A  number  of  them  have 
abandoned  or  modified  established  pension  sys- 
tems of  their  own,  as  in  the  case  of  Columbia, 
Harvard  and  Yale,  in  reliance  upon  the  pension 
system  of  the  Carnegie  Foundation  which  they 
have  substituted  for  them.  Others,  in  response 
to  a  definite  offer  of  the  foundation  to  place  them 
on  its  accepted  list  if  they  would  comply  with 
certain  stipulated  conditions,  have  made  changes 
in  their  constitutions  and  in  their  denomina- 
tional relations.  Yet  others,  in  return  for  the 
extension  of  the  benefits  of  the  pension  system 
to  them,  undertook  to  provide  retiring  allow- 
ances for  their  teachers  not  eligible  to  the  ben- 
efits of  the  Carnegie  Foundation,  and  are  now 
under  moral,  if  not  legal,  obligations  to  make 
provision  for  the  continuance  of  those  benefits. 

Thus  it  seems  clear  that  the  Carnegie  Foun- 
dation is  under  moral  obligations,  not  only  to  in- 
dividuals, but  to  the  institutions  themselves,  not 
to  deprive  teachers  in  the  accepted  institutions 
of  their  present  expectancy  of  a  pension.  There 
is  no  middle  ground  for  the  compromise  of  moral 


PENSIONS  201 

obligations.  We  are  therefore  of  the  opinion 
that  the  Carnegie  Foundation  should  not  assume 
any  new  function  until  its  present  obligations 
both  moral  and  legal  are  examined  with  preci- 
sion, and  provision  made  explicitly  for  meeting 
those  obligations,  and  we  believe  that  the  foun- 
dation is  under  the  strongest  moral  obligation  to 
include  within  the  benefits  of  its  existing  pen- 
sion system  all  teachers  in  accepted  institutions, 
regardless  of  their  age,  to  whom  its  present  reg- 
ulations were  applicable  in  the  academic  year 
1915-16. 

m 

With  reference  to  the  proposed  **  Comprehen- 
sive Plan  of  Insurance  and  Annuities*'  we  would 
say  at  the  outset  that  we  consider  that  the  ex- 
isting pension  system  of  the  Carnegie  Founda- 
tion might  properly  be  supplemented  by  some 
sjrstem  of  mutual  insurance,  with  special  provi- 
sion for  disability  and  for  teachers  who  are  not 
of  sound  qualifications — that  is  of  sub-standard 
physical  qualifications — and  for  widow's  allow- 
ances, the  benefit  of  which  system  might  well  be 
extended  to  instructors  in  institutions  not  on  the 
accepted  list  of  the  foundation.  Such  a  system 
should  be  mutual  in  character,  so  conducted  that 
the  'beneficiaries  of  the  plan  would  control  its 
management  and  be  entitled  to  participate  in 
any  surplus  accumulation  of  insurance  funds, 
and  it  should  offer  to  all  participants  a  definite 


202  CABNEGIE 

contract.  The  existing  pension  system  does  not 
offer  adequate  protection  against  the  risk  of  dis- 
ability and  it  offers  no  protection  for  the  risk  of 
death  before  the  completion  of  25  years  of  service. 

We  believe  that  the  foundation  could  render  a 
highly  useful  service  to  college  and  university 
teachers  by  the  use  of  its  organization  in  the  col- 
lection of  data  and  in  assisting,  in  conjunction 
with  representatives  of  the  teaching  profession, 
in  the  organization  of  such  a  plan  of  insurance, 
the  cost  of  which  should  be  defrayed  from  pre- 
miums paid  by  the  insured.  The  members  of  the 
teaching  profession  undoubtedly  constitute  a 
group  having  common  aims  and  experience  such 
as  make  entirely  feasible  and  desirable  the  es- 
tablishment of  such  a  plan  of  insurance.  But  we 
find  ourselves  unable  at  this  time  to  approve  of 
the  proposed  comprehensive  plan  of  insurance 
and  annuities,  both  because  it  is  proposed  as  a 
substitute  for  a  plan  which  we  believe  should  not 
be  abandoned  in  principle — ^because  it  does  not 
itself  contribute  to  the  advancement  of  teach- 
ing— and  also  because  we  are  not  satisfied  that 
the  proposed  plan  is  not  open  to  serious  objec- 
tions, which  should  be  subjected  to  systematic 
study  and  to  the  scrutiny  of  experts  before  it  is 
finally  adopted. 

The  past  experience  of  the  foundation  and  its 
present  financial  embarrassment  should  serve  as 
a  warning  of  the  perils  involved  in  the  laying 
out  and  putting  into  operation  of  an  insurance 


PENSIONS  203 

plan  for  the  payment  of  pensions  and  annuities 
extending  over  an  indefinite  period  into  the 
future  and  lacking  in  its  statement  many  of  the 
details  on  which  must  necessarily  depend  its  suc- 
cess or  failure.  The  members  of  this  committee 
have  acquired  from  their  recent  experience  a 
lively  sense  of  the  concern,  not  to  say  mental  dis- 
tress and  financial  loss,  which  may  result  from 
the  failure  or  abandonment  of  such  a  plan  after 
the  great  body  of  teachers  have  come  to  rely 
upon  its  protection. 

We  believe,  therefore,  that  before  the  adoption 
of  the  proposed  plan,  or  any  plan  which  under- 
takes the  establishment  of  a  scheme  of  life  and 
disability  insurance  and  the  payment  of  annu- 
ities to  college  teachers,  additional  data  and  de- 
tailed information  should  be  available  for  study 
and  criticism.  No  doubt  such  data  have  been 
gathered  and  considered  by  the  foundation,  but 
before  an  invitation  is  accepted  to  participate  in 
a  plan  involving  the  ultimate  investment  of  a 
large  sum  of  money  by  members  of  the  teaching 
profession,  and  affecting  vitally  the  future  of 
college  and  university  teachers  throughout  the 
country,  we  believe  that  a  specific  statement 
should  be  prepared  and  submitted  by  the  foun- 
dation showing  its  liabilities,  accrued  and  pros- 
pective, under  the  existing  plan,  whether  moral 
or  legal.  It  will  then  be  possible  to  ascertain 
definitely  what  financial  resources  are  available, 
and  therefore  whether  they  are  sufficient  to  en- 


204  CABNEGIE 

sure  the  success  of  the  proposed  plan  of  insur- 
ance and  annuities  or  of  any  other  plan  which 
may  be  adopted  involving  participation  by  the 
Carnegie  Foundation. 

There  should  also  be  prepared  and  submitted 
a  statement  showing  the  prospective  progress 
and  details  of  operation  of  the  proposed  plan  for 
insurance  and  annuities,  as  estimated  in  advance 
during  a  term  of  years,  presumably  at  least  for 
two  generations.  For  this  purpose  the  founda- 
tion should  prepare  and  present  a  schedule 
showing  the  estimated  operations  of  the  insur- 
ance company  and  the  savings  or  annuity  fund. 
It  should  show  the  number  of  lives,  classified  as 
to  age,  that  are  expected  to  participate  in  the 
plan  at  the  present  time,  with  the  estimated  in- 
crease in  membership  from  year  to  year.  It 
should  show  the  income  in  the  way  of  premiums, 
the  expected  or  estimated  contributions  of  va- 
rious institutions  and  colleges,  the  interest  in- 
come, the  expected  death  claims,  the  expense, 
and  the  annual  amount  which  must  be  reserved 
to  meet  the  reserve  requirements  of  the  New 
York  insurance  law.  Such  statement  when  pre- 
pared should  be  submitted  to  a  committee  or 
committees  of  representative  teachers  and  of 
representatives  of  some  recognized  organization 
of  actuaries,  such  as  for  example  the  Actuarial 
Society  of  America. 

Then  and  only  then  will  it  be  possible,  we  be- 
lieve, to  form  an  intelligent  judgment  as  to  the 


PENSIONS  206 

probable  financial  success  of  the  plan  and  as  to 
the  real  service  which  it  is  capable  of  rendering 
to  the  teaching  profession.  In  order  that  ade- 
quate opportunity  may  be  had  for  such  study  of 
the  problem  and  the  formation  of  such  judg- 
ment, we  are  of  the  opinion  that  a  period  of  at 
least  one  year  is  necessary,  and  we  respectfully 
suggest  that  formal  action  with  respect  to  this 
or  any  other  plan  of  insurance  and  annuities  for 
college  teachers  should  be  postponed  at  least  one 
year  from  the  date  of  the  meeting  of  the  trus- 
tees of  the  foundation  to  be  held  on  the  15th 
of  November,  1916. 

It  also  seems  to  the  committee  desirable,  and 
it  therefore  requests,  that  opportunity  be  given 
to  representatives  of  the  American  Association 
of  University  Professors  to  be  present  and  to  be 
heard  at  that  meeting  of  the  trustees.  And  in 
view  of  the  importance  of  the  subject  and  its  far- 
reaching  consequences  to  all  university  teach- 
ers in  America,  we  venture  to  express  the  hope 
that  no  plan  of  insurance  or  annuities  for  uni- 
versity teachers  will  be  adopted  by  the  founda- 
tion without  further  consultation  with  the  as- 
sociation. 

We  believe  also  that  the  consideration  of  this 
and  other  problems  affecting  the  interests  of 
university  teachers  would  be  facilitated  and 
greater  cooperation  insured  if  the  policy  were 
adopted  of  electing  university  teachers  to  the 
Board  of  Trustees  of  the  Carnegie  Foundation 
from  time  to  time  as  opportunity  presents. 
14 


206  CABNEGIE 

We  think  that  a  consideration  of  the  details 
of  the  proposed  plan  at  this  time  is  of  minor  im- 
portance. Nevertheless  it  is  desirable  that  we 
should  direct  attention  to  some  of  the  numerous 
criticisms  of  it  which  appear  to  us  to  raise  ques- 
tions which,  so  far  as  can  be  gathered  from  Presi- 
dent Pritchett's  report,  have  not  received  ade- 
quate consideration.  With  respect  to  a  number 
of  these  the  committee  expresses  no  opinion,  for 
it  has  had  neither  the  time  nor  the  resources  to 
enable  it  to  make  any  thorough  investigation  of 
them.  But  if  sufficient  opportunity  is  afforded 
for  the  study  of  the  details  of  the  proposed  plan 
of  insurance  and  annuities,  as  we  have  already 
suggested,  then  we  believe  these  criticisms  should 
receive  careful  consideration.  Among  them  may 
be  mentioned  the  following : 

(a)  The  proposed  plan  for  insurance  and  an- 
nuities does  not  provide  with  sufficient  definite- 
ness  for  a  plan  of  mutual  participation,  whereby 
the  participants  in  the  plan  shall  share  in  its 
management  and  in  the  accumulated  surplus. 

(&)  The  proposed  disability  benefit  limits 
the  payment  of  the  benefit  to  professors  who 
have  been  in  service  15  years  or  more.  In  our 
opinion  disability  ought  to  be  defined  as  disabil- 
ity from  carrying  on  university  service  for  any 
time  during  the  period  of  service,  and  adequate 
provision  made  to  insure  against  disability  as 
thus  defined.  The  consequences  of  the  teacher's 
disability  are  usually  much  more  serious  during 


PENSIONS  207 

the  earlier  years  of  the  period  of  service  than  in 
the  later  years. 

(c)  The  difficulties  of  establishing  a  plan  of 
insurance  which  would  be  compulsory  for  all 
participants  have  not  received  sufficient  consid- 
eration. We  are  of  the  opinion  that  the  compul- 
sory feature  of  the  plan  is  open  to  serious  objec- 
tion, and  that  it  is  doubtful  whether  it  can  be 
carried  into  practical  operation.  Among  the  ob- 
jections which  may  be  briefly  enumerated  are — 
that  it  restricts  unduly  the  freedom  of  the  indi- 
vidual teacher;  that  state  universities  and  col- 
leges would  find  themselves  legally  incompetent 
to  contribute  to  a  scheme  for  the  benefit  of 
teachers,  and  that  an  attempt  to  render  them 
competent  to  do  so  through  process  of  legislation 
would  involve  the  entire  vexed  question  of  in- 
surance for  state  employees;  that  the  tendency 
would  be  to  take  from  the  teacher  *s  salary  the 
share  contributed  by  the  college  toward  his  in- 
surance by  deferring  increases  of  salary;  that 
teachers  already  carrying  commercial  insurance 
would  be  unwilling  to  give  up  such  insurance; 
or  to  continue  it  with  the  added  burden  of  com- 
pulsory insurance;  and  that  many  of  those  who 
have  heretofore  not  taken  commercial  insurance 
would  probably  have  valid  reasons  for  declining 
to  participate. 

{d)  The  plan  does  not  sufficiently  disclose 
whether  participants  in  it  are  to  be  subjected 
to  a  medical  examination,  and,  if  such  examina- 


208  CAENEGIE 

tions  are  to  be  made,  it  does  not  make  adequate 
provision  for  those  who  are  sub-standard  risks. 
If  no  medical  examination  is  to  be  required,  it 
does  not  appear  whether  there  are  sufficient  data 
available  on  which  to  base  an  estimate  of  the  cost 
of  this  class  of  group  insurance  for  long  periods. 
In  the  absence  of  such  data  the  acceptance  of 
such  risks  would  imperil  the  success  of  the  plan, 
(e)  It  has  been  urged  by  some  that  a  plan 
for  insurance  of  teachers  could  be  devised  and 
carried  into  effect  with  established  insurance 
companies,  eliminating  agents*  commissions,  at  a 
cost  not  substantially  greater  than  the  cost  of  in- 
surance under  the  plan  proposed,  but  with  the 
added  benefit  of  the  experience,  stability  and  es- 
tablished organization  of  the  better  commercial 
insurance  companies.  Without  expressing  any 
final  opinion  upon  this  contention,  we  may  say 
that  it  is  not  clear  from  President  Pritchett's 
report  what  saving  in  cost  of  insurance  is  effected 
over  the  cost  of  insurance  on  a  similar  plan 
which  might  be  effected  with  the  commercial 
companies.  Such  information  as  we  have  been 
able  to  gather  indicates  that  the  difference  in 
cost  would  be  very  slight,  and  that  by  carrying 
into  effect  the  proposed  plan  the  Carnegie  Foun- 
dation would  substitute  for  its  former  activities 
a  venture  into  a  field  new  to  it,  not  free  from 
business  hazards,  but  long  and  successfully  oc- 
cupied by  others,  without  any  definite  expecta- 
tion of  substantial  financial  advantage. 


PENSIONS  209 

(/)  The  proposed  plan  does  not  make  clear 
that  there  is  any  definite  separation  of  the  in- 
surance from  the  annuity  plan,  and  is  in  any 
ease  too  rigid,  and  does  not  offer  sufficient  variety 
of  types  of  insurance  to  be  adaptable  to  the  needs 
of  university  professors. 

(g)  Adequate  consideration  has  not  been 
given  to  the  possibility  of  combining  with  the 
proposed  savings  fund  a  provision  for  decreas- 
ing term  insurance  so  that  as  the  savings  fund 
increases  the  amount  of  insurance  may  decrease 
with  consequent  saving  of  its  cost. 

(h)  No  definite  provision  is  made  for  the  pay- 
ment of  dividends  or  other  disposition  of  surplus 
accumulation  under  the  proposed  plan. 

(i)  Sufficient  consideration  has  not  been  given 
to  the  position  of  one  who  withdraws  from  the 
teaching  profession  and  wishes  to  continue  his 
insurance  upon  a  proper  basis. 

(i)^No  consideration  has  apparently  been 
given  to  the  relative  age  of  professors  and  their 
wives  and  to  its  effect  on  the  cost  of  the  annuity.* 

(A;)  No  provision  is  made  for  enabling  those 
who  already  have  insurance  to  avail  themselves 
advantageously  of  the  benefits  of  the  proposed 
plan. 

The  unfortunate  financial  history  of  the  foun- 

«  Thia  objection  has  apparently  been  met  in  the  non- 
confidential copy  of  President  Pritchett's  report  which, 
however,  was  not  in  the  hands  of  the  committee  at  the 
time  of  preparing  this  report. 


210  CABNEGIE 

dation,  the  suggested  change  in  its  fundamental 
purpose  under  the  guise  of  a  change  of  rules  re- 
lating to  its  administration,  the  defects  and  omis- 
sions in  the  proposed  Comprehensive  Plan  of 
Insurance  and  the  unconvincing  character  of 
the  reasons  which  are  urged  for  the  change,  have 
resulted  in  a  loss  of  confidence  in  the  foundation 
on  the  part  of  American  university  teachers. 
No  man  enjoying  a  wide  acquaintance  with  mem- 
bers of  the  profession  can  have  any  doubt  of  this 
fact.  If  evidence  of  it  were  needed,  it  may  be 
found  in  the  reports  of  various  committees  of 
university  faculties,  appointed  to  consider  the 
Comprehensive  Plan  of  Insurance  and  Annu- 
ities, such  as,  for  example,  the  reports  of  Cor- 
nell, Harvard,  Princeton,  Stanford  University, 
the  University  of  Wisconsin  and  Johns  Hopkins 
University.  Such  lack  of  confidence  must  in- 
evitably impair  the  usefulness  of  the  foundation, 
and  make  it  difficult,  if  not  impossible,  to  solve 
satisfactorily  the  problems  which  are  pressing 
for  solution.  We  deem  it  of  the  highest  impor- 
tance that  every  effort  should  be  made  on  the 
part  of  those  interested  in  the  promotion  of  the 
purposes  of  the  foundation  to  repair  that  loss. 
For  the  full  realization  of  this  end  four  things 
seem  to  us  chiefly  requisite.  The  first  is  the  pub- 
lication by  the  foundation  of  a  definite  assurance 
that  it  will  completely  fulfil  any  expectations 
held  out  to  teachers  in  the  associated  institutions 
by  the  present  rules.    The  second  is  a  strict  ad- 


PENSIONS  211 

herence  to  the  fundamental  principles  and  pur- 
poses indicated  by  Mr.  Came^e  in  his  letter  of 
gift  and  repeatedly  enunciated  in  the  early  pub- 
lic declarations  of  the  foundation,  on  the  basis 
of  which  the  existing  system  was  established. 
The  third  is  the  encouragement  of  a  more  active 
and  direct  participation  of  the  teaching  profes- 
sion in  the  management  of  the  foundation  and  in 
the  consideration  of  questions  which  gravely 
affect  the  future  of  the  profession  and  of  the 
American  universities  and  colleges.  Finally  it 
seems  to  us  essential,  if  the  foundation  is  to  en- 
joy the  confidence  of  the  academic  profession 
and  attain  its  highest  usefulness,  that  it  should 
be  recognized  that  for  it,  even  more  than  for 
other  institutions,  definiteness  and  steadiness  of 
purpose  and  stability  of  policy  are  indispensable. 
It  is  our  earnest  hope  that  the  future  work  of 
the  foundation  with  its  potency  for  notable  serv- 
ice to  American  education  may  be  firmly  based 
upon  these  principles. 
The  committee : 

Thomas  S.  Adams,  Yale  University. 
Francis  H.  Bohlen, 

University  of  Pennsylvania. 
Walter  W.  Cook,  Yale  University. 
F.  S.  Deibler,  Northwestern  University. 
Frank  H.  Dixon,  Dartmouth  College. 
Thomas  C.  Esty,  Amherst  College. 
W.  F.  Gephart,  Washington  University. 
John  H.  Gray,  University  of  Minnesota. 


212  CARNEGIE 

Henry  B.  Gardner,  Brown  University. 
M.  W.  Haskell,  University  of  California. 
Otto  Heller,  "Washington  University. 
Jacob  H.  Hollander, 

Johns  Hopkins  University. 
S.  S.  Huebner,  University  of  Pennsylvania. 
Joseph  Jastrow,  University  of  Wisconsin. 
E.  W.  Kemmerer,  Princeton  University. 
Alfred  C.  Lane,  Tufts  College. 
Arthur  0.  Lovejoy, 

Johns  Hopkins  University. 
H.  A.  MiLLis,  University  of  Chicago. 
Carl  C.  Plehn,  University  of  California. 
H.  L.  RiETZ,  University  of  Illinois. 
Ashley  H.  Thorndikb,  Columbia  University. 
Henry  S.  White,  Vassar  College. 
W.  F.  WiLLCox,  Cornell  University. 
Harlan  F.  Stone,  Chairman, 

Columbia  University. 


SECOND  REPORT  OF  THE  COMMITTEE  ON 

PENSIONS  AND  INSURANCE  OF  THE 

AMERICAN  ASSOCIATION  OF 

UNIVERSITY  PROFESSORS! 

In  the  report  of  this  committee,  submitted  at 
the  annual  meeting  of  the  Association  in  Chi- 
cago on  December  28,  1917,  the  committee  dis- 
cussed at  length  the  plans  of  insurance  prepared 
by  the  joint  commission  appointed  at  the  re- 
quest of  the  Carnegie  Foundation  to  consider 
the  various  suggestions  for  a  plan  of  insurance 
for  college  teachers,  and  at  the  conclusion  of  the 
report  the  committee  formulated  its  views  and 
recommendations  as  follows : 

1.  We  believe  tha/t  the  plan  of  insurance  as  proposed 
by  the  commission,  if  actuarially  sound,  is  well  adapted 
in  its  general  features  to  meet  the  needs  of  teachers  in 
American  universities  and  colleges,  although  we  believe 
experience  will  indicate  that  the  plan  should  be  modified 
in  some  particulars. 

2.  We  recommend  that  this  association  do  not  appoint 
representatives  to  participate  in  the  organization  of  the 
proposed  insurance  company  until  there  is  substantial 
compliance  with  the  conditions  hereinafter  enumerated. 

3.  We  recommend  that  the  American  Association  of 
University  Professors  express  its  approval  of  the  plan 

1  Printed  in  School  and  Society,  March  8,  1919.    This 
report  was  presented,  and  unanimously  approved,  at  the 
annual  meeting  of  the  association,  held  at  Baltimore  on 
Saturday,  December  28,  1918. 
213 


214  CABNEGIE 

and  cooperate  in  launeMng  it,  when  the  following  condi- 
tiona  have  been  satisfied: 

(a)  That  before  taking  any  steps  toward  the  organi- 
zation of  the  proposed  insurance  company  and  before  the 
diversion  of  any  funds  available  to  the  Carnegie  Foun- 
dation, to  the  purposes  of  the  proposed  insurance  com- 
pany, the  present  obligations  of  the  foundation,  both 
legal  and  moral,  be  examined  and  determined,  so  far  as 
is  practicable,  with  precision  and  definite  and  binding 
assurances  be  given  by  the  Carnegie  Foundation  or  some 
other  responsible  body  that  provision  will  be  made  for 
meeting  those  obligations  to  the  extent  of  the  financial 
resources  of  the  Carnegie  Foundation  and  of  any  funds 
available  to  it. 

(6)  That  the  proposed  plan  of  insurance  together  with 
a  comprehensive  statement  of  its  prospective  operation 
be  submitted  to  an  independent  body  of  actuaries  for 
study,  and  its  criticism  and  suggestions  invited. 

(c)  That  the  proposed  plan  of  insurance  be  so  modi- 
fied that  an  the  organization  of  the  proposed  insurance 
company  suitable  provision  be  made  whereby  within  a 
reasonable  time,  if  not  inmiediately,  the  power  to  elect 
the  company's  trustees  or  directors  shall  be  vested  in 
the  policy-holders,  in  proportion  to  their  contribution  to 
the  financial  resources  of  the  insurance  company,  and 
that  they  shall  have  authority  to  vote  in  person,  or  by 
proxy,  at  all  meetings  for  the  election  of  directors. 

The  committee  reserves  the  privilege  of  bringing  to 
the  attention  of  the  association  other  matters  germane 
to  this  subject  or  supplementing  the  foregoing  recom- 
mendations when  such  action  seems  desirable. 

These  recommendations  were  approved  by  vote  of  the 
association  and  it  was  further  voted  **that  when  in  the 
judgment  of  the  Committee  P,  concurred  in  by  the 
Executive  Committee,  the  plans  of  insurance  of  the  Car- 
negie Foundation  conform  to  the  spirit  of  the  recom- 
mendations in  this  report,  the  Executive  Committee  be 


PENSIONS  215 

authorized  to  take  such  steps  aa  may  be  necessary  for 
cooperation  in  carrying  out  these  plans." 

During  the  past  year  this  committee  has  car- 
ried on  an  extensive  correspondence  with  its  own 
members  and  with  members  of  the  teaching  pro- 
fession, and  it  has  sought  through  personal  in- 
terviews and  correspondence  with  President 
Pritchett  of  the  Carnegie  Foundation  to  com- 
municate to  the  foundation  in  detail,  the  views 
of  the  committee  which  have  been  summarized 
in  previous  reports,  and  it  has  endeavored  to 
secure  some  real  cooperation  between  the  foun- 
dation and  this  committee  in  formulating  plans 
for  the  protection  of  the  interests  of  those  en- 
titled to  the  benefit  of  the  existing  pension  plan 
and  for  the  establishment  of  the  proposed  scheme 
of  insurance,  which  would  meet  the  expressed 
views  of  the  association  and  which  would  com- 
mend themselves  generally  to  members  of  the 
teaching  profession. 

The  committee  presents  its  report  in  two  parts 
relating,  respectively,  to  the  plans  for  the  future 
of  the  existing  pension  plan,  and  to  the  new 
plan  for  teachers*  insurance  and  annuities.  In 
each  case,  it  first  records  the  recent  action  of  the 
foundation  and  its  dealings  with  the  committee, 
and  then  appends  the  committee 's  comments  and 
recommendations : 


216  CABNEGIE 

1.    FUTURE  OF   EXISTING  PENSION   SYSTEM 
A.  EECOED  OP  ACTION  TAKEN 

In  April,  1918,  the  trustees  of  the  foundation 
adopted  and  made  public  a  statement  in  which 
was  announced  the  future  policy  of  the  founda- 
tion with  respect  to  administering  the  existing 
pension  scheme.  This  statement  (copies  of 
which  may  be  procured  from  the  Carnegie  Foun- 
dation) so  far  as  now  relevant,  may  briefly  be 
summarized  as  follows : 

(a)  It  announced  the  accumulation  of  a  re- 
serve fund  for  the  liquidation  of  pension  obliga- 
tions, to  be  paid  into  the  treasury  of  the  founda- 
tion by  the  Carnegie  Corporation.  This  fund  is 
to  be  made  up  of  five  million  dollars,  to  be  paid 
into  the  treasury  of  the  foundation  as  of  Janu- 
ary 1,  1918,  and  further  additions  thereto  which 
are  to  be  made  at  the  rate  of  $600,000  annually 
for  a  period  of  ten  years,  making  a  total  reserve 
to  be  paid  by  the  corporation  aggregating  eleven 
million  dollars  without  including  accumulations 
of  interest  on  the  capital  of  the  reserve  fund. 

(&)  It  was  announced  that  pensions  would 
not  be  paid  to  teachers  appointed  to  positions 
in  associated  institutions  after  November  17, 
1915.  A  resolution  to  this  effect  was  adopted  by 
the  trustees  of  the  foundation  on  May  18,  1917. 

(c)  It  was  announced  that  the  plan  of  retire- 
ment with  maximum  pension  allowances  at  age 
65  would  be  continued  until  June  30,   1923. 


PENSIONS  217 

After  that  date  the  age  of  retirement  with  the 
maximum  allowance  will  be  advanced  until  June 
30,  1928,  after  which  date  the  maximum  age  of 
retirement  with  the  maximum  allowance  will  be 
seventy  years.  The  increase  of  age  of  retirement 
was  indicated  as  follows: 

Between  July  1,  1923,  and  June  30,  1925,  maximum 
allowance  at  66. 

Between  July  1,  1925,  and  June  30,  1926,  maximum 
allowance  at  67. 

Between  July  1,  1926,  and  June  30,  1927,  maximum 
allowance  at  68. 

Between  July  1,  1927,  and  June  30,  1928,  maximum 
allowance  at  69. 

It  was  also  announced  that  as  an  alternative 
the  teacher  is  to  be  given  the  option  of  retiring 
on  reaching  age  sixty-five,  with  a  diminishing 
pension  allowance,  the  actual  allowance  being 
the  maximum  allowance  diminished  at  the  rate 
of  one  fifteenth  for  each  year  by  which  the  age 
at  which  the  maximum  allowance  is  available  is 
anticipated. 

For  those  reaching  age  sixty-five  after  June 
30,  1923,  who  are  unmarried  the  allowance  is  to 
be  reduced  to  66§  per  cent,  (to  85  per  cent,  if 
the  salary  is  $1,800  or  less). 

The  reason  given  for  these  sweeping  reduc- 
tions of  the  benefits  of  the  existing  pension  sys- 
tem was  that  actuarial  computations  prepared 
for  the  foundation  indicate  that  the  resources  of 
the  foundation,  including  the  reserve  fund  ere- 


218  CABNEGIE 

ated  through  the  generosity  of  the  Carnegie 
Corporation  already  referred  to,  will  not  be  suf- 
ficient to  maintain  the  pension  plan  on  the  pres- 
ent basis  for  those  who  are  appointed  to  asso- 
ciated institutions  before  November  17,  1915, 
without  a  substantial  diminution  in  the  rate  of 
expenditure. 

2.  The  following  resolutions  were  adopted  by 
this  committee  at  a  meeting  held  June  17,  1918, 
in  New  York  City,  and  were  thereafter  trans- 
mitted to  the  trustees  of  the  Carnegie  Foun- 
dation : 

Voted,  that:  the  plan  embodied  in  President  Pritchett's 
public  statement  of  April,  1918,  and  subsequently  adopted 
by  the  trustees  of  the  Carnegie  Poimdation  without  pre- 
vious consultation  with  this  committee  or  any  other  rep- 
resentative body  of  imiversity  teachers,  does  not  conform 
to  the  spirit  of  the  recommendations  contained  in  the 
second  report  of  this  committee  of  January,  1918.  We 
therefore  offer  the  following  suggestions  for  the  amend- 
ment of  the  plan: 

(a)  That,  in  view  of  the  repeated  declarations  of  the 
trustees,  it  is  manifestly  implied  that  the  entire  eleven 
million  dollars  recently  granted  by  the  corporation,  to- 
gether with  its  increment  and  with  the  interest  on  the 
original  capital  of  the  foundation,  is  to  be  devoted  ex- 
clusively to  the  payment  of  pensions,  with  a  view  to 
realizing,  as  nearly  as  these  resources  permit,  the  rea- 
sonable expectations  of  teachers  in  accepted  institutions, 
upon  the  basis  of  the  rules  in  force  on  November  17, 
1915.  The  committee  accordingly  requests  the  trustees 
of  the  foundation  to  publish  a  formal  declaration  to  this 
effect. 

(&)  That,  inasmuch  as  it  is  clearly  impossible  at  the 


FBN8I0N8  219 

present  time  to  detennine  with  even  approximate  pre- 
cision what  scale  of  pensions  these  resources  will  permit 
the  foundation  to  pay,  the  committee  protests  against 
the  adoption  at  this  time  of  any  permanent  scale,  and 
especially  against  that  proposed  in  President  Pritchett  's 
communication  of  April,  1918,  which  there  is  reason  to 
believe  to  be  less  liberal  than  the  above  mentioned  re- 
sources will  make  possible.  The  scheme  of  pensions  set 
forth  in  that  communication  should,  however,  be  made 
public  as  an  indication  of  the  minimum  benefits  which 
younger  teachers  in  the  accepted  institutions  may,  in 
the  least  favorable  circumstances,  expect.  It  is  also  de- 
sirable that  the  actuarial  computations  and  the  data  on 
which  they  are  based  be  made  accessible  to  representa- 
tives of  the  teaching  profession. 

(c)  That,  in  view  of  the  special  hardship  of  sudden 
changes  in  the  rules  affecting  men  near  the  age  of  retire- 
ment, the  provision  relating  to  men  between  60  and  65, 
in  President  Pritchett 's  statement  of  April,  1918,  should 
be  observed  by  the  foundation. 

(d)  That,  at  the  end  of  five  years  from  the  present 
date,  the  foundation  should  in  the  light  of  its  experience 
up  to  that  time,  and  upon  the  basis  of  further  actuarial 
studies,  take  up  with  a  committee  of  this  association  the 
question  of  the  framing  of  new  rules,  in  accordance  with 
the  principle  mentioned  under  (a),  should  at  that  time 
determine  what  pensions,  approximating  as  nearly  as 
possible  to  the  1915  rules,  its  resources  will  enable  it  to 
pay.  Decision  as  to  the  least  objectionable  modifications 
of  those  rules  should  be  reached  only  after  consultation 
with  representatives  of  the  university  teaching  profes- 
sion, i.  e.,  with  a  committee  of  this  association  and  pos- 
sibly with  other  bodies. 

(e)  That,  any  new  scale  of  pensions,  to  be  adopted  in 
1923,  as  provided  in  the  preceding  paragraph,  shall  not 
apply  detrimentally  to  teachers  who,  on  June  30,  1923, 
are  between  the  ages  of  60  and  65. 


220  CABNEGIE 

(/)  Tliat,  the  retroactive  provision,  "wheretoy  teachers 
entering  the  service  of  accepted  institutions  between 
November  17,  1915,  and  the  date  of  the  actual  annul- 
ment of  the  old  rule  by  the  foundation  are  excluded  from 
the  benefits  of  the  existing  pension  system,  is  not  in  ac- 
cord with  the  declaration  of  the  trustees  *Hhat  whatever 
plan  is  finally  adopted  will  be  devised  with  scrupulous 
regard  to  the  privileges  and  expectations  which  have 
been  created  under  existing  rules,"  and  should  be  re- 
pealed. 

It  was  further  voted,  *'that  the  foundation  be  re- 
quested to  encourage  the  governing  bodies  of  the  several 
associated  institutions  to  adopt  a  plan  whereby  the 
younger  teachers  now  entitled  to  the  benefits  of  the  ex- 
isting pension  plan  be  enabled  to  retire  at  sixty-five 
rather  than  at  seventy." 

3.  At  the  animal  meeting  of  the  board  of  trus- 
tees of  the  Carnegie  Foundation,  November, 
1918,  the  following  minute  was  adopted,  and  was 
on  November  21,  transmitted  to  this  Committee. 

The  board  of  trustees  acknowledges  the  receipt  of  the 
suggestions  and  recommendations  contained  in  the  reso- 
lutions adopted  by  the  Committee  on  Pensions  and  In- 
surance of  the  American  Association  of  University  Pro- 
fessors at  its  meeting  of  June  17,  1918.  The  trustees  of 
the  foundation  have  sought  to  comply  as  fully  with  the 
suggestions  of  the  committee  as  the  fixed  amoimt  now 
available  for  these  retiring  allowances  will  enable  them 
to  do.  In  response  to  these  resolutions  the  trustees  au- 
thorize the  following  additional  statements  which  would 
seem  to  make  clear  the  purposes  of  the  trustees : 

(a)  The  reserve  created  by  the  aid  of  the  Carnegie 
Corporation  and  the  subsequent  additions  to  it  and  all 
interest  accumulations  thereon  can  be  used  under  the 
arrangement  with  the  Carnegie  Corporation  only  for  the 


PENSIONS  221 

payment  of  the  retiring  allowances  to  teachers  in  the 
associated  colleges  and  universities. 

(&)  The  adjustment  explained  in  the  statement  to 
teachers  of  the  associated  Institutions  in  the  circular  of 
the  foundation  dated  April  22,  1918,  stated  that  the 
scale  adopted  was  based  upon  exhaustive  actuarial  ex- 
aminations, but  that  the  experience  of  the  future  might 
show  a  situation  that  would  make  possible  a  more  liberal 
scale  than  that  based  ujwn  these  actuarial  computations. 
In  the  event  that  such  a  reduction  in  the  expected  load  is 
realized  it  is  the  intention  of  the  trustees  to  make  as 
liberal  provision  for  the  payment  of  pensions  as  the 
funds  will  permit. 

(c)  The  income  of  the  endowment  of  the  foundation 
is  now  being  expended  in  accordance  with  the  directions 
of  the  founder  *'to  provide  retiring  pensions  for  the 
teachers  of  universities,  colleges  and  technical  schools  in 
our  country,  Canada  and  Newfoundland  under  such  con- 
ditions as  you  (the  trustees)  may  adopt  from  time  to 
time.'*  But  it  was  further  provided  by  the  foimder 
that  **by  a  two  third  vote  they  (the  trustees)  may  from 
time  to  time  apply  the  revenue  in  a  different  manner  and 
for  a  different  though  similar  purpose  to  that  specified, 
should  coming  days  bring  such  changes  as  to  render  this 
necessary  in  their  judgment  to  produce  the  best  results 
possible  for  the  teachers  and  for  education."  It  is,  of 
course,  not  possible  for  trustees  to  bind  their  successors 
with  respect  to  either  of  these  conditions.  It  is  under- 
stood that  the  expense  of  educational  studies  is  met  from 
a  special  endowment  not  available  for  pensions. 

(d)  The  actuarial  computations  upon  which  the  action 
of  the  trustees  has  been  based  are  at  the  disposition  of 
the  committee  for  any  examination  they  may  desire  to 
make. 

B.   COMMENTS   OF   THX   COMMITTES 

The  net  result  of  these  negotiations,  and  of  the 
eventual  action  of  the  foundation  with  respect 
15 


222  CABNEGIE 

to  the  existing  pension  system,  may  be  briefly 
summarized  as  follows : 

(a)  Through  the  generosity  of  the  Carnegie 
Corporation  eleven  million  dollars  has  been 
added  to  the  funds  of  the  foundation  for  the  pur- 
pose of  enabling  it  to  fulfil,  to  a  greater  extent 
than  its  previous  resources  made  possible,  the  ex- 
pectations of  retiring  allowances  justified  by  the 
published  rules  and  announcements  of  the  foun- 
dation. 

(&)  Certain  additional  assurances  have  been 
given  that  this  fund  will  be  used  for  the  payment 
of  pensions.  It  is  to  be  observed,  however,  that 
the  above-noted  resolution  (a)  of.  the  trustees  of 
the  foundation,  to  the  effect  that  the  reserve  cre- 
ated by  the  corporation's  gift  **can  be  used  un- 
der the  arrangement  with  the  corporation  only 
for  the  payment  of  retiring  allowances  to  teach- 
ers in  the  associated  colleges  and  universities,'* 
is  in  express  conflict  with  the  terms  of  the  agree- 
ment between  the  corporation  and  the  founda- 
tion. As  published  in  **A  Statement  to  the 
Teachers  in  the  Associated  Colleges  and  Univer- 
sities" (April  5,  1918),  that  agreement  provides 
(p.  7)  that  if  **the  reserve  should  prove  greater 
than  is  demanded  for  this  purpose  (the  payment 
of  pensions) ,  the  remainder  shall  be  added  to  the 
permanent  endowment  of  the  foundation  to  be 
used  for  its  corporate  purposes."  It  was  to  in- 
sure the  use  of  the  entire  reserve  fund  for  the 
payment  of  retiring  allowances  instead  of  the 


PENSIONS  223 

ultimate  addition  of  a  substantial  portion  of  it 
to  the  endowment  of  the  Carnegie  Foundation 
that  the  committee  urged  the  trustees  to  adopt 
a  definite  program  for  revision  of  the  scale  of  re- 
tiring allowances  at  the  expiration  of  a  fixed 
period  and  in  the  light  of  actual  experience,  a 
suggestion  which  for  reasons  not  disclosed  the 
trustees  have  declined  to  accept. 

It  is  further  to  be  observed  that,  even  by  the 
terms  of  the  resolution  of  November,  1918,  there 
is  assurance  that  the  funds  of  the  foundation 
will  be  used  for  the  payment  of  pensions  only 
so  long  as  the  present  agreement  between  the 
foundation  and  the  corporation  remains  unmod- 
ified. That  agreement,  however,  can  apparently 
be  modified  at  any  time  by  the  consent  of  the 
two  boards,  which  consist  in  great  part  of  the 
same  persons. 

In  their  formal  statement  the  trustees  give  no 
assurance  that  the  income  from  the  endowment 
of  the  foundation  will  be  used  for  the  payment 
of  pensions;  and  the  published  rules  can  be 
varied  or  abandoned,  at  any  time  without  the 
violation  of  any  legal  obligation,  or  of  any  moral 
obligation  differing  in  nature  from  those  which 
the  foundation  has,  in  several  previous  instances, 
indicated  that  it  does  not  regard  as  binding. 

(c)  In  disregard  both  of  the  vote  unanimously 
adopted  by  the  joint  commission  (of  which  the 
president  of  the  foundation  and  five  of  its  trus- 
tees were  members) ,  and  published  in  its  report 


224  CABNEGIE 

of  April  27,  1917  (p.  8),  in  disregard  also  of  the 
above-cited  resolutions  of  this  committee,  the 
board  of  trustees  has  declined  to  modify  its  ac- 
tion whereby  teachers  entering  the  service  of  the 
accepted  institutions  since  November,  1915,  will 
be  deprived  of  pensions  to  which  they  were  en- 
titled under  rules  not  abrogated  until  1917. 
There  is  no  reason  to  doubt  that  a  number  of 
teachers  have  been  influenced  to  retain  positions 
in,  or  accept  calls  to,  these  institutions,  during 
this  period,  by  the  expectation  that  they  would 
receive  the  pensions  specified  by  the  rules  then 
apparently  in  force.  The  committee,  therefore, 
is  compelled  (especially  in  view  of  the  founda- 
tion's now  increased  resources)  to  take  the  view 
that  the  foundation  has  disregarded  the  formally 
announced  declaration  of  its  trustees  *  *  that  what- 
ever plan  is  finally  adopted  will  be  devised  with 
scrupulous  regard  to  the  privileges  and  expec- 
tations which  have  been  created  under  existing 
rules. ' ' 


INSURANCE 
!  A.   BECOBD    OP    ACTION    TAKEN 

1.  The  plan  of  insurance  referred  to  in  our 
last  report,  with  some  modifications  and  addi- 
tional details,  has  been  submitted  by  President 
Pritchett  to  a  committee  of  the  Actuarial  Society 
of  America  and  to  a  committee  of  the  American 


PENSIONS  226 

Institute  of  Actuaries  for  their  criticisms  and 
suggestions.  Both  committees  have  reported  in 
substance  that  the  plan  as  submitted  is  safe  and 
practicable  if  capably  managed.  Apparently, 
however,  no  definite  plan  for  the  selection  of 
risks  was  submitted  to  either  of  these  committees, 
and  the  reports  of  both  committees  urge  con- 
servatism in  the  selection  of  risks  by  certifica- 
tion. Both  recommend  changes  in  the  form  of 
policy  and  both  comment  at  length  on  the  fact 
that  the  policies  provide  for  a  flat  premium  rate 
without  the  usual  rebate  or  ** dividend"  to  pol- 
icy-holders which  is  offered  in  participating  poli- 
cies. Taken  together  the  two  reports  indicate 
no  adequate  reason  for  not  issuing  the  usual 
form  of  participating  policy  sold  by  other  insur- 
ance companies  organized  or  doing  business  un- 
der the  laws  of  New  York.  (Copies  of  these 
reports  may  be  obtained  from  the  Carnegie 
Foundation.) 

2.  An  insurance  company  has  been  incor- 
porated under  the  laws  of  the  State  of  New  York, 
under  the  name,  ** Teachers*  Insurance  and  An- 
nuity Association  of  America. '  *  It  is  announced 
that  the  company  is  to  begin  business  with  a 
capital  of  one  million  dollars  paid  into  the  In- 
surance Company  by  the  Carnegie  Corporation 
(not  the  Carnegie  Foundation,  as  originally  pro- 
posed) which  owns  and  holds  the  entire  capital 
stock  of  five  hundred  thousand  dollars.  The 
trustees    of    the    Carnegie    Corporation    have 


226  CABNEGIE 

adopted  the  following  resolution  with  respect  to 
the  control  of  the  insurance  company : 

Voted,  That  it  is  the  intention  of  the  Carnegie  Cor- 
poration whenever  a  group  of  policy-holders  has  been  se- 
cured sufSciently  large  to  be  representative  of  the  col- 
lege and  university  teachers  of  the  United  States  and 
Canada,  in  conference  with  the  interested  parties  to  pro- 
vide machinery  by  which  the  policy-holders,  through  rep- 
resentatives selected  by  them,  shall  participate  in  the 
election  of  the  trustees  who  manage  the  association. 

As  at  present  constituted,  however,  the  insur- 
ance and  annuity  association  is  controlled  by  a 
board  of  sixteen  trustees  chosen  by  the  Carnegie 
Corporation  as  provided  by  the  by-laws  of  the 
insurance  association.  Six  trustees  constitute  a 
quorum  for  the  transaction  of  business.  Its  pres- 
ident is  Henry  S.  Pritchett,  who  is  also  president 
of  the  Carnegie  Foundation ;  its  secretary  is  the 
secretary  of  the  foundation ;  the  treasurer  is  the 
treasurer  of  the  foundation;  and  the  chairman 
of  the  board  is  a  member  of  the  foundation's 
board  of  trustees.  Of  the  trustees  of  the  insur- 
ance company,  eight  are  or  recently  have  been 
trustees  or  employees  of  the  Carnegie  Founda- 
tion ;  the  same  is  true  of  four  of  the  six  members 
of  the  executive  committee.  Three  members  of 
this  committee  constitute  a  quorum  and  the  com- 
mittee is  given  all  the  powers,  of  the  board  of 
directors,  in  the  intervals  between  the  meetings 
of  the  board.  There  are  two  professorial  repre- 
sentatives on  the  board  of  trustees:  Professor 


PENSIONS  227 

Michael  M.  McKenzie,  of  the  University  of  To- 
ronto, and  Dean  F.  W.  Nicholson,  of  Wesleyan 
University,  formerly  a  trustee  of  the  foundation. 
There  are  no  professorial  representatives  on 
either  the  executive  committee  or  the  finance 
committee. 

It  should  be  added  that  two  members  of  your 
committee  were,  as  individuals,  offered  appoint- 
ments to  the  board  of  trustees  of  the  insurance 
company  by  President  Pritchett,  who  at  that 
time  proposed  to  have  three  teachers  elected  to 
the  board  of  trustees.  It  seemed  clear  to  both 
members  that  they  could  not  with  propriety  ac- 
cept such  appointment,  while  the  question  of 
approving  the  new  corporation 's  plan  was  pend- 
ing before  the  committee,  and  before  the  com- 
mittee's report  had  been  submitted  to  the  asso- 
ciation. The  committee  was  given  no  informa- 
tion with  respect  to  the  personnel  of  the  officers 
and  trustees  of  the  insurance  company  or  of  the 
provision  of  the  charter  and  by-laws  until  the 
company  was  organized,  its  trustees  and  officers 
selected  and  the  details  of  the  organization  pub- 
licly announced. 

There  has  lately  been  published  by  the  Teach- 
ers' Annuity  and  Insurance  Corporation  of 
America  a  Handbook  of  Life  Insurance  and  An- 
nuity Policies  for  Teachers,  which  is  a  brief  pro- 
spectus of  the  newly  formed  insurance  company, 
giving  details  of  the  policies  which  it  proposes 
to  write  and  stating  the  premium  rate.     This 


228  CABNEGIE 

booklet  either  has  been,  or  will  shortly  be,  dis- 
tributed to  college  and  university  teachers.  It  is 
therefore  unnecessary  to  summarize  its  contents 
in  this  report. 

B.  COMMENTS  AND  EECOMMENDATIONS  OP  THE  COMMITTEE 
WITH  RESPECT  TO   THE  PLAN   OP  INSURANCE 
AND    ANNUITIES 

1.   Control  of  the  Company 

Neither  the  plan  for  control  of  the  insurance 
company  unanimously  recommended  by  the  joint 
commission,  nor  a  definite  plan  for  the  eventual 
mutualization  of  the  company,  proposed  by  this 
committee,  has  been  adopted.  The  corporation, 
in  the  resolution  above  cited  declares  only  its  in- 
tention, at  some  future  time  not  specified,  to 
**  provide  machinery  whereby  the  policy  holders 
through  representatives  selected  by  them  shall 
participate  in  the  election  of  the  trustees."  A 
literal  fulfillment  of  this  intention  would  be 
compatible  with  a  wholly  negligible  representa- 
tion of  the  policy-holders  or  the  teaching  profes- 
sion on  the  board  of  trustees  or  in  the  processes 
by  which  the  trustees  are  to  be  elected.  Mean- 
while, the  company  is  left  in  a  control  which,  for 
all  practical  purposes,  is  identical  with  that  of 
the  Carnegie  Foundation.  We  deem  it  unnec- 
essary to  repeat  at  length  those  portions  of  our 
last  report^  in  which  we  direct  attention  to  the 
menace  to  educational  freedom  in  the  United 
2  School  and  Society,  December  2,  1916. 


PENSIONS  229 

States  of  uniting  in  the  Carnegie  Foundation  the 
function  of  critic  and  mentor  of  our  educational 
institutions  with  that  of  distributing  financial 
benefits  to  such  institutions  and  of  controlling 
the  savings  of  their  teachers.  We  did  not  in  fact 
at  that  time  contemplate  that  the  insurance  com- 
pany was  to  be  brought  immediately  under  the 
control  of  the  foundation.  We  only  pointed  out 
that  **the  exigencies  of  death  and  retirement  of 
the  members  of  a  self-perpetuating  board  of 
trustees  might  in  a  comparatively  short  time 
place  the  absolute  control  of  the  company  in  the 
hands  of  a  board  and  of  executive  officers  who 
were  also  members  of  the  governing  board  of  the 
foundation  or  are  virtually  selected  by  that 
body.  Such  an  outcome  would,  in  this  com- 
mittee's opinion,  be  sure  to  create  dissatisfaction 
and  antagonism  on  the  part  of  the  policy-holders 
and  would  be  prejudicial  to  the  success  of  the 
undertaking.'*  What  we  contemplated  as  only 
a  possible  eventuality  turns  out  to  be  the  basis 
of  the  organization  of  the  insurance  company 
as  it  is  to  begin  business. 

2,  Rates  of  Premium 

On  account  of  the  late  date  of  issue  of  the 
Handbook  of  the  Teachers'  Insurance  and  An- 
nuity Association,  the  committee  has  not  been 
able  to  make  an  exhaustive  examination  of  all 
the  types  of  policies  therein  offered,  or  to  at- 
tempt a  complete  comparison  of  the  rates  with 


230  CABNEGIE 

those  charged  for  similar  policies  by  existing 
companies.  So  far,  however,  as  the  committee 
has  been  able  to  make  such  comparisons,  it  does 
not  find  that,  taken  at  their  face-value,  the  non- 
participating  policies  offered  by  the  insursmce 
and  annuity  association  are,  in  point  of  cost, 
more  advantageous  to  college  or  university  teach- 
ers, than  are  those  offered  by  a  number  of  well- 
managed  participating  companies,  when  allow- 
ance is  made  for  the  '* dividends"  paid  by  the 
latter.  An  actuary  of  one  of  the  largest  insur- 
ance companies  states,  in  reply  to  an  inquiry  of 
the  chairman  of  the  committee : 

So  far  as  coneerns  participating  policies,  I  have  made 
a  comparison  on  the  ordinary  life  plan  at  three  ages,  25, 
35  and  45,  with  a  company  which  pays  as  large  dividends 
as  any  other  American  company.  The  difference  be- 
tween the  gross  premium  charged  by  that  company,  less 
the  dividend  paid  for  a  period  of  ten  years,  shows  a  re- 
sulting cost  slightly  in  excess  of  the  rates  charged  by  the 
teachers'  association.  If  the  policy  were  terminated  at 
any  time  within  ten  years,  it  would  be  more  advantage- 
ous to  have  carried  insurance  with  the  teachers'  associa- 
tion, but  less  advantageous  after  that  time  because  of 
the  increase  in  dividends  under  the  participating  policy. 

A  similar  estimate  has  been  made  by  President 
Pritchett  in  a  communication  to  the  chairman  of 
this  committee.  If  a  policy  issued  by  the  teach- 
ers' association  be  compared  with  a  similar  pol- 
icy issued  by  a  certain  well-known  company,  the 
premium  in  the  latter,  Mr.  Pritchett  observes, 
**will   be   much  higher. '^     **If  however,''   he 


PENSIONS  231 

adds,  **you  cany  the  company  mutual 

rates  into  the  future  and  assume  that  earnings  on 
the  company  *s  investments  are  going  to  be  on 
the  same  level  as  of  recent  years,  you  will  find 
that  at  the  end  of  about  ten  years  the  net  cost  of 

the  company  policy  rate  thus  obtained 

will  come  down  to  the  level  of  the  corresponding 
rate  published  in  the  handbook.  In  time  it  may 
fall  below  the  rate  there  quoted/'  President 
Pritchett,  however,  offers  reasons,  which  seem 
to  the  committee  unconvincing,  for  doubting 
whether  the  company  he  names,  or  other  par- 
ticipating companies,  will  continue  to  obtain  the 
present  rate  of  interest  on  their  investments. 

Other  computations  made  for  the  committee 
confirm  the  conclusion  that,  except  for  very 
short  term  policies,  college  and  university  teach- 
ers can  probably  do  as  well  by  taking  insurance 
in  any  one  of  several  existing  companies  as  by 
purchasing  the  policies  of  the  new  association  at 
the  rates  now  announced  and  with  the  benefits 
thus  far  promised,  if  there  is  no  distribution  of 
surplus  among  policy-holders.  It  should  be 
added  that  the  new  company  offers,  in  addition 
to  the  more  usual  policies,  some  desirable  forms 
of  annuity  and  insurance  not  at  present  written 
by  most  of  the  older  companies  which  President 
Pritchett  believes  will  be  desired  by  university 
teachers.  The  committee  believes,  however,  that 
the  latter  companies  would  readily  write  similar 
policies  at  approximately  the  same  net  cost  to 


232  CABNEGIE 

the  purchaser,  if  requested  to  do  so  by  any  con- 
siderable number  of  university  teachers. 

The  explanation  offered  by  President  Pritchett 
in  his  12th  Annual  Report  (1917),  for  the  un- 
willingness of  the  Teachers*  Insurance  and  An- 
nuity Association  to  offer  participating  insur- 
ance, as  most  companies  at  present  do,  is  the 
statement  that,  under  the  laws  of  the  state  of 
New  York,  ** dividends"  of  participating  com- 
panies are  required  to  be  distributed  annually 
and  that  the  annual  dividends  of  the  new  com- 
pany would  for  a  time  be  so  small  as  to  be  less 
than  the  cost  of  postage.  This  explanation  seems 
to  the  committee  so  inconsequential  as  to  require 
no  discussion. 

3.    Use  of  Surplus 

It  is  true  that,  as  President  Pritchett  has 
pointed  out,  the  new  company  may  be  expected, 
since  it  pays  no  dividends,  rapidly  to  accumulate 
a  surplus,  and  that  it  is  in  a  more  favorable  posi- 
tion for  doing  so  than  ordinary  companies.  In 
a  letter  to  the  chairman  of  this  committee,  Mr. 
Pritchett  states  that  **  under  the  provisions  of 
the  charter  such  accumulations  must  be  used  for 
the  benefit  of  the  policy-holders.'*  The  com- 
mittee is,  however,  upon  examination  of  the 
charter,  unable  to  find  in  it  such  a  provision. 
The  only  clause  relevant  to  the  matter  is  that 
which  requires  the  corporation  **to  conduct  its 
business  without  profit  to  the  corporation  or  its 


PENSIONS 


stockholders/'  There  is  in  the  by-laws  a  further 
provision  that  no  officers  or  trustees  shall  be  paid 
salaries  in  excess  of  $5,000  per  annum,  "unless 
such  payment  shall  first  be  authorized  by  a  vote 
of  the  board  of  trustees  of  the  association,"  also 
that  no  pension  shall  be  paid  to  any  officer  or 
trustee,  or  to  any  member  of  his  family.  There 
is  in  these  provisions  no  assurance  that  the  ac- 
cumulations will  be  used  wholly  for  paying  divi- 
dends to  policy-holders  or  for  reducing  their  pre- 
miums. The  charter,  indeed,  expressly  provides 
that  the  corporation  "shall  transact  business  ex- 
clusively on  the  non-mutual  basis  and  shall  issue 
only  non-participating  policies."  Policy-hold- 
ers would  have  no  legal  standing  to  object  to  the 
amendment  or  repeal  of  the  provision  of  the 
charter  and  by-laws  referred  to,  either  by  action 
of  the  Carnegie  Corporation,  the  sole  stock- 
holder, or  by  any  purchaser  or  subsequent  owner 
of  the  stock.  There  is  nothing  at  the  present 
time  to  prevent  the  board  of  trustees  from  em- 
ploying at  their  discretion  the  surplus  from  the 
savings  invested  by  college  and  university  teach- 
ers in  the  company — within  the  limitations  set 
by  the  above-cited  clauses  and  by  the  laws  of 
the  state  of  New  York  relating  to  insurance 
companies. 

The  committee  finds  it  pertinent  at  this  point 
to  recall  a  sentence  from  the  report  unanimously 
adopted  by  the  joint  commission  in  1917 :  "  The 
man  of  thirty  who  participates  in  a  pension  plan 


234  CABNEGIE 

under  which  he  expects  an  annuity  thirty-five  or 
forty  years  in  the  future  will  take  some  risk  of 
disappointment  in  accepting  any  arrangement 
less  secure  than  a  contractual  one."  This  re- 
mark has,  we  believe,  been  more  than  once  cited 
with  approval  by  President  Pritchett;  and  it  in- 
dicates, in  the  committee's  opinion,  the  primary 
rule  which  should  guide  the  action  of  any  teach- 
ers who  may  be  considering  dealing  with  the  new 
company.  The  warning  thus  incorporated  in 
the  report  of  the  joint  commission  gains  force 
from  any  review  of  the  history  of  the  Carnegie 
Foundation.  Those  responsible  for  the  manage- 
ment of  Mr.  Carnegie's  benefaction  have  exer- 
cised very  freely  and  frequently  the  liberty  of 
changing  their  minds  and  of  radically  and  ab- 
ruptly altering  the  policy  of  the  foundation. 
Since  the  new  insurance  company  is  under  the 
same  management,  there  is  no  reason  to  antici- 
pate that  its  history  will  not  be  similar,  so  far  as 
the  insurance  laws  permit.  The  committee, 
therefore,  is  strongly  of  the  opinion  that  any  col- 
lege or  university  teacher  will  take  some  risk  of 
disappointment  in  accepting  any  assurance  less 
secure  than  a  contractual  one  for  the  employ- 
ment of  the  accumulated  surplus  of  the  new 
company  exclusively  for  the  benefit  of  the  policy- 
holders through  the  payment  of  dividends  or 
reduction  of  premiums.  No  such  contractual 
guarantee  is  now  offered  by  the  Teachers'  In- 
surance and  Annuity  Association;  in  fact,  it  is 


PENSIONS  235 

forbidden  by  its  charter  to  give  such  guarantee, 
and  the  contract  actually  offered  by  the  associa- 
tion contains  the  provision:  **This  policy  is  is- 
sued on  the  non-participating  plan.  It  is  not 
entitled  to  participate  in  the  surplus  of  the  asso- 
ciation." 

Yet  it  is  to  be  remembered  that  eventually  the 
surplus,  if  any  large  number  of  teachers  should 
take  insurance  in  the  company,  will  be  derived 
chiefly  from  interest  upon  funds  contributed  by 
those  teachers  in  the  form  of  premiums,  or  by 
universities  or  colleges  in  their  behalf. 

If  the  new  company,  however,  is  prepared  to 
give  binding  guarantees  upon  the  point  in  ques- 
tion, the  committee  is  unable  to  see  why  it 
should  for  a  moment  hesitate  to  amend  its  char- 
ter so  as  to  require  the  company  to  write  only 
participating  policies;  nor  indeed,  is  the  com- 
mittee able  to  see  why  a  charter  permitting  this 
should  not  have  been  obtained  in  the  first  place. 

4.  Selection  of  Bisks 

The  committee  finds  the  provisions  thus  far 
announced  with  respect  to  medical  examination 
and  selection  of  risks  to  be  indefinite  and  unsat- 
isfactory. President  Pritchett  states  that  **the 
policy  of  the  association  will  be  to  make  the  med- 
ical examination  a  simple  and  reasonable  one**; 
and  he  apparently  implies  that  the  requirements 
of  the  association  in  this  respect  will  be  less  ex- 
acting than  those  of  conservative  companies  of- 


236  CABNEGIE 

fering  general  insurance.  The  natural  effect  of 
this — taken  in  connection  with  the  considera- 
tions already  mentioned — ^will  be  that  the  policy- 
holders of  the  new  company  will  consist  largely 
of  risks  rejected  by  other  companies,  while  the 
great  majority  of  teachers  who  are  good  risks 
will,  the  committee  anticipates,  prefer  to  pur- 
chase their  insurance  from  long-established  par- 
ticipating companies  of  good  reputation. 

5.  Surrender  Value  of  Annuity  Policies 

So  far  as  yet  appears  from  the  announcement 
of  the  insurance  company,  and  from  the  form 
of  annuity  policy  which  it  proposes  to  write, 
there  is  no  indication  that  annuity  policy-holders 
will  at  any  time  before  reaching  the  age  of  sixty- 
five  have  the  option  of  claiming  the  cash  value  of 
their  policies  instead  of  an  annuity  beginning  at 
age  sixty-five.  This  is  in  conflict  with  the  ex- 
press recommendation  of  the  joint  commission. 

The  teacher  who  on  reaching  age  sixty-five  is 
in  failing  health  or  afflicted  with  an  incurable 
disease  should  not  be  compelled  to  invest  his 
life 's  savings  in  an  annuity. 

6.  Disability  and  Convertibility  Clauses 

The  committee  regrets  that  the  sample  forms 
of  policies  submitted  contain  a  *'  disability*' 
clause  which  does  not  in  any  way  comply  with 
the  former  recommendations  of  this  committee, 


PENSIONS  237 

in  that  it  merely  provides  for  a  waiver  of  pre- 
miums in  event  of  disability,  but  does  not  pro- 
vide for  any  disability  allowance,  as  do  the  dis- 
ability clauses  in  policies  offered  by  many  insur- 
ance companies.  We  also  regret  that  the  term 
policies  offered  by  the  association  do  not  contain 
any  provision  for  conversion  into  higher  pre- 
mium contracts,  as  do  the  similar  policies  issued 
by  most  insurance  companies. 

7.    Compulsory  Participation  in  the  Plan  by 
Teachers 

The  Rules  of  the  Carnegie  Foundation  for  Ad- 
mission of  Institutions  and  for  Granting  Retir- 
ing Allowances  (1918)  provide  that  (p.  3), 
**  After  April  22,  1918,  colleges  and  universities 
to  be  eligible  to  the  associated  list,  must  have  ac- 
cepted a  participation  in  the  contributory  plan 
of  old  age  annuities  for  their  teachers  as  pro- 
vided in  the  Teachers'  Insurance  and  Annuity 
Association  of  America.'*  At  the  date  of  draft- 
ing this  report  the  committee  has  received  no 
complete  statement  as  to  the  terms  on  which  this 
participation  may  be  had. 

For  reasons  stated  in  its  first  report^  a  ma- 
jority of  this  committee  does  not  favor  any  plan 
which  involves  compulsory  purchase  of  insur- 
ance or  annuities  by  teachers  and  the  committee 
would  regard  any  attempt  by  particular  institu- 
tions, to  designate  the  company  in  which  teach- 

3  School  and  Society,  December  2,  1916. 


238  CABNEGIE 

ers  shall  invest  their  savings,  as  an  intolerable 
invasion  of  the  private  rights  of  the  individual 
affected. 

For  the  reasons  above  stated,  and  other  less 
important  ones  which  it  would  unduly  lengthen 
this  report  to  include,  your  committee  is  unable 
to  recommend  that  this  association  express  its 
approval  of  the  plan  of  the  Teachers'  Insurance 
and  Annuity  Association,  or  that  this  association 
cooperate  in  promoting  that  plan.  The  com- 
mittee is,  for  the  same  reason,  unable  to  hold  that 
members  of  this  association  would  be  acting 
either  for  their  own  interest  or  that  of  their  pro- 
fession in  purchasing  insurance  or  annuities  in 
the  new  corporation,  under  its  present  rules  and 
form  of  organization. 

The  committee  further  expresses  the  hope  that 
all  teachers  will  energetically  oppose  any  at- 
tempt to  use  the  power  of  university  governing 
boards  to  prescribe  to  members  of  university 
faculties  the  manner  in  which  they  shall  invest 
their  own  savings,  whether  in  the  form  of  insur- 
ance, the  purchase  of  annuities,  or  in  any  other 
manner. 

Finally,  the  committee  recommends  that  this 
committee  be  discharged  and  that  a  new  com- 
mittee be  constituted  with  authority  on  behalf 
of  the  association : 

(a)  To  examine  and  report  upon  the  actu- 
arial data  on  the  basis  of  which  the  foundation 


PENSIONS  239 

adopted  its  revised  schedule  of  pension  allow- 
ances, as  published  in  the  foundation's  state- 
ment of  April  28,  1918,  and  to  observe  and  re- 
port upon  the  administration  of  the  existing  pen- 
sion system,  and 

(6)  To  examine  any  modified  plans  of  the 
Teachers'  Insurance  and  Annuity  Association  of 
America,  if  such  should  be  offered,  and  to  inves- 
tigate the  possibility  of  effecting  suitable  insur- 
ance for  college  teachers  either  through  the  co- 
operation of  established  insurance  companies,  or 
the  organization  of  a  mutual  insurance  company 
for  college  teachers,  and  to  report  the  results  of 
their  investigation  to  this  association. 
The  Conunittee : 
Thomas  S.  Adams,  Yale  University, 
Walter  W.  Cook,  Yale  University, 
F.  S.  DiEBLER,  Northwestern  University, 
Frank  H.  Dixon,  Dartmouth  College, 
Thomas  C.  Esty,  Amherst  College, 
W.  F.  Gephart,  Washington  University, 
John  H.   Gray,  Board  of  Appliance,  39 

Whitehall  St.,  New  York  City, 
Henry  B.  Gardiner,  Brown  University, 
M.  W.  Haskell,  University  of  California, 
Otto  Heller,  Washington  University, 
Jacob  H.  Hollander,  The  Johns  Hopkins 

University, 
S.  S.  HuEBNER,  University  of  Pennsylvania, 
Joseph  Jastrow,  University  of  Wisconsin, 
E.  W.  Kemmerer,  Princeton  University, 


240  CABNEGIE 

Alfred  C.  Lane,  Tufts  College,* 

Arthur  0.  Lovejoy,  The  Johns  Hopkins 

University, 
H.  A.  MiLLis,  University  of  Chicago, 
H.  L.  Rietz,  Iowa  University,* 
Ashley  H.  Thorndike,  Columbia  Univer- 
sity, 
Henry  S.  White,  Vassar  College, 
W.  F.  WiLLCox,  Cornell  University, 
Harlan    F.    Stone,    Chairman^    Columbia 
University. 

4  Professor  Lane  and  Professor  Rietz  are  not  prepared 
to  condemn  the  general  principle  of  compulsory  insur- 
ance, provided  it  is  stipulated  for  by  the  contract  be- 
tween the  teacher  and  his  college  or  university  at  the 
time  of  his  appointment. 


SUPPLEMENTARY    STATEMENT    CONCERN- 
ING THE  PLAN  OF  COMPULSORY  AND 
CONTRIBUTORY    ANNUITIES    PRO- 
POSED BY  THE  CARNEGIE 
FOUNDATION! 

Certain  information  concerning  the  plan  for 
compulsory  annuities,  referred  to  near  the  close 
of  the  report  of  Committee  P,  has  come  into  the 
hands  of  the  officers  of  the  association  and  the 
chairman  of  the  committee  since  the  report  was 
drafted.  In  view  of  the  importance  of  the  mat- 
ter, and  of  the  desirability  of  prompt  communi- 
cation of  this  information  to  members  of  the  as- 
sociation, it  has  seemed  best  to  the  president  of 
the  association  and  the  chairman  of  the  com- 
mittee to  submit  the  following  supplementary 
statement,  for  which  the  signers  alone  are  re- 
sponsible. A  submission  of  the  matter  to  the 
committee  would  have  precluded  immediate  pub- 
lication. 

A  circular  of  the  Carnegie  Foundation  which 
bears  the  date  of  December  6,  1918,  but  which 
had  not  reached  the  chairman  of  the  committee 
before  the  Baltimore  meeting,  states  as  follows 
the  terms  upon  which  colleges  or  universities 
may  be  admitted  to  participation  in  the  new  sys- 
tem of  compulsory  annuities  for  teachers  re- 
ferred to  in  the  committee 's  report : 

1  Printed  in  School  and  Society,  February  1,  1919. 
241 


242  CABNEGIE 

1  (a)  Each  full-time  professor,  associate  professor, 
assistant  professor,  or  oflacer  of  equivalent  rank  in  the 
service  of  associated  institutions,  who  does  not  enjoy  the 
privileges  given  under  the  non-contributory  plan  now  in 
operation,  shall  contribute  annually  in  monthly  install- 
ments five  per  cent,  of  his  salary  toward  an  old  age  an- 
nuity contract  in  the  Teachers  Insurance  and  Annuity 
Association.  In  the  case  of  institutions  admitted  here- 
after to  the  associated  list  this  requirement  shall  apply 
to  all  professors,  associate  professors,  assistant  professors 
and  officers  of  equivalent  rank  admitted  to  the  service 
of  the  institution  after  acceptance  of  participation  in 
the  contributory  plan. 

(h)  Each  associated  institution  shall  pay  a  correspond- 
ing five  per  cent,  in  the  case  of  any  such  contributing 
professor,  associate  professor,  assistant  professor  or  offi- 
cer of  equivalent  rank,  provided  that  the  institution 
shall  be  under  no  obligation  to  begin  its  payments  before 
the  teacher  begins  his,  or  to  make  annual  contributions 
in  excess  of  those  made  by  him. 

(c)  Each  institution  shall  make  a  like  contribution  in 
the  case  of  any  teacher  below  the  rank  of  assistant  pro- 
fessor who  has  voluntarily  accepted  a  participation  in 
the  contributory  plan  and  who  has  had  not  less  than 
three  years  of  service  as  a  teacher  in  a  college,  univer- 
sity or  technical  school. 

2.  The  trustees  of  the  Carnegie  Foundation  request 
that  any  institution  now  associated  with  the  foundation 
which  desires  to  be  admitted  to  the  new  privileges  of  the 
foundation,  including  disability  allowances,  will  announce 
its  acceptance  of  the  contributory  system,  and  the  spe- 
cific plan  upon  which  the  institution  itself  will  partici- 
pate, to  become  effective  not  later  than  January  1,  1920. 

The  effect  of  these  provisions  would  be  to  es- 
tablish a  system  of  compulsory  annuity  con- 
tributions by  teachers   in  the  institutions  in 


PENSIONS  243 

which  the  provisions  are  adopted.  In  such  insti- 
tutions every  teacher  of  the  rank  of  assistant 
professor  or  above  will — ^whether  or  not  he  needs, 
desires  or  can  afford  to  purchase  an  annuity  in 
this  amount — be  required  to  pay  five  per  cent,  of 
his  salary  towards  the  cost  of  an  annuity  in  the 
new  insurance  corporation.  He  will,  however, 
receive  a  like  amount  from  his  institution  to- 
wards the  purchase  of  the  annuity.  Colleges  or 
universities  imposing  this  requirement  upon 
their  teachers,  and  making  the  specified  con- 
tribution, will  be  listed  as  **  associated  institu- 
tions*'; and  to  teachers  in  institutions  on  this  list 
the  foundation  announces  its  **  intention  * '  (but 
** without  any  legal  obligation'')  of  granting  the 
two  following  additional  privileges: 

(a)  **The  foundation  will  provide  from  its  in- 
come, if  necessary,  such  amounts  as  may  be  nec- 
essary to  secure  to  teachers  in  associated  colleges 
and  universities  an  annual  return  of  four  and 
one  half  per  cent,  on  the  payments  made  by  them 
to  the  Teachers  Insurance  and  Annuity  Associa- 
tion for  the  purchase  of  deferred  annuities — 
said  sums  to  be  paid  at  the  time  of  retirement  or 
in  case  of  death."  (Policy  holders  not  in  asso- 
ciated institutions  are  guaranteed  by  the  insur- 
ance company  interest  at  the  rate  of  four  per 
cent,  only.) 

(h)  The  foundation  also  intends  to  grant  to 
teachers  in  associated  institutions  disability  al- 
lowances upon  the  following  terms : 


244  CABNEGIE 

(a)  Disability  shall  be  interpreted  to  mean  total  per- 
manent disability  as  certified  by  a  medical  examiner 
designated  by  the  foundation. 

(ft)  To  be  eligible  to  a  disability  allowance  the 
teacher  must  have  contributed  for  not  less  than  five  years 
toward  an  old  age  annuity  and  must  have  been  during 
the  period  in  active  service. 

(c)  When  retired  on  the  ground  of  disability  the 
teacher  will  assign  his  annuity  policy  to  the  foundation. 

(d)  The  foundation  will  provide  an  annuity  of  two 
thirds  the  amount  the  teaeher  would  have  obtained  if  he 
had  continued  to  age  sixty-five  average  contributions 
equal  to  the  average  of  the  five  years  preceding  his  disa- 
bility. The  annuity  payments  will  continue  for  life,  or 
in  case  of  death,  until  the  accumulation  to  the  credit  of 
the  teacher  has  been  returned  to  his  estate.  Annuity  al- 
lowances will  be  limited  to  a  maximum  of  three  thousand 
dollars,  and  are  subject  to  discontinuance  in  case  of  the 
annuitant's  recovery  of  health.  In  the  case  of  such  re- 
covery the  unexpended  portion  of  the  contributions  made 
by  and  for  the  teacher,  and  their  accumulations,  shall 
remain  to  his  credit. 

Teachers  in  colleges  or  universities  not  upon 
the  list  of  associated  institutions  may  purchase 
insurance  or  annuities  in  the  new  company,  hut 
will  not  enjoy  the  two  additional  benefits  above 
specified,  which  are  offered  by  the  foundation, 
not  by  the  insurance  company,  and  are  not  con- 
tractual. 

The  question  thus  arises  whether  it  is  to  the 
interest  of  teachers,  and  of  the  institutions,  that 
colleges  and  universities  should  accept  the  con- 
tributory plan,  and  impose  upon  their  professors 
the  requirement  that  they  devote  a  portion  of 


PENSIONS  246 

their  salaries  to  the  purchase  of  deferred  annu- 
ities in  the  new  Teachers  Insurance  and  Annuity 
Association.  Upon  this  point  the  signers  of  this 
supplementary  statement  offer  the  following  ob- 
servations : 

1.  There  is  manifestly  a  strong  presumption 
— for  reasons  indicated  in  the  report  of  the  com- 
mittee— against  action  by  college  or  university 
trustees  which  would  have  the  effect  of  com- 
pelling all  teachers  of  professorial  rank,  not 
merely  to  purchase  annuities  which  they  may 
neither  need  nor  desire,  but  also  to  make  this  in- 
vestment of  their  savings  in  a  particular  com- 
pany designated  by  the  trustees.  There  appears 
to  us  to  be  an  equally  manifest  presumption 
against  colleges  offering  a  bonus  to  teachers  in 
order  to  induce  them  to  purchase  insurance  in  a 
particular  company.  In  our  opinion,  colleges 
or  universities  which  are  disposed  to  add  five 
per  cent,  to  the  salaries  of  teachers  on  condition 
that  the  teachers  devote  this  and  a  like  sum  from 
his  present  salary  to  the  purchase  of  a  deferred 
annuity,  should  leave  the  teacher  free  to  select 
the  company  in  which  he  will  thus  invest  a  por- 
tion of  his  compensation. 

It  may,  however,  be  contended  that  the  pre- 
sumptions just  mentioned  are  offset  by  the  fact 
that  the  Carnegie  Foundation  offers  institutions 
two  specific  inducements  to  require  their  teach- 
ers to  purchase  annuities  in  the  Teachers  Insur- 
ance and  Annuity  Corporation,  and  to  make  con- 


246  CABNEGIE 

tributions  from  their  corporate  funds'  towards 
the  same  purpose — ^the  inducements,  namely,  of 
disability  insurance,  and  the  addition  of  one 
half  of  one  per  cent,  to  the  interest  on  payments 
made  towards  the  purchase  of  annuities  in  the 
new  company.  The  question  consequently  re- 
solves itself  into  this :  Are  these  two  benefits  suf- 
ficient to  annul  the  presumptions  above  men- 
tioned, and  to  justify  boards  of  trustees  in  en- 
tering into  an  agreement  with  the  Carnegie 
Foundation  for  the  establishment  of  the  pro- 
posed contributory  and  compulsory  system  of 
professorial  annuities?  Upon  this  question  the 
following  considerations  seem  pertinent. 

{a)  The  Carnegie  Foundation  does  not  con- 
tract, nor  does  it  promise,  to  grant  the  two  ben- 
efits specified  to  the  teachers  in  institutions 
which  may  adopt  the  proposed  plan.  It  care- 
fully disclaims  any  contractual  responsibility, 
and  merely  declares  its  ** intention"  of  granting 
those  benefits.  Experience  has  shown,  however, 
that  in  great  part  the  intentions  announced  by 
the  Carnegie  Foundation  remain  unfulfilled. 
The  foundation  has,  in  the  course  of  its  history, 
offered  to  American  colleges  and  universities, 
upon  certain  conditions,  an  extensive  series  of 
benefits  for  their  teachers.  In  spite  of  the  ful- 
fillment of  the  conditions  by  many  institutions,  a 
number  of  the  most  important  of  these  benefits 
have  been  withdrawn,  and  the  rest  have  been 
greatly  reduced  in  value.     It  appears  to  us, 


PENSIONS  247 

therefore,  that  a  declaration  of  intention  by  this 
corporation  does  not  afford  a  substantial  basis 
for  any  action  by  the  governing  board  of  a  col- 
lege or  university. 

(h)  In  any  case,  any  sums  taken  out  of  the 
income  of  the  foundation  to  provide  disability 
insurance  for  teachers  in  institutions  on  the  new 
** accepted  list'*  or  to  increase  the  rate  of  interest 
on  future  annuity  payments,  must  reduce  by  so 
much  the  sum  available  for  fulfilling  the  **  rea- 
sonable expectations"  of  teachers  entitled  to 
pensions  under  the  old  rules.  Committee  P  has, 
as  its  report  indicates,  urged  upon  the  trustees 
of  the  foundation  that  a  ** scrupulous  regard" 
for  the  obligations  of  the  foundation  to  these 
older  teachers  would  require  that  those  expecta- 
tions— and  especially  such  as  were  justified  by 
the  rules  in  force  in  1915 — should  be  as  nearly 
fulfilled  as  the  resources  of  the  foundation  may 
permit,  though  they  can  not  in  any  event  be  ful- 
filled completely.  The  committee  had  under- 
stood the  trustees  to  accept  this  principle  and  to 
declare  their  intention  of  acting  upon  it.  Never- 
theless, it  is  now  announced  that  a  part  of  the 
income  of  the  foundation  will  be  diverted  to 
other  uses.  What  should  be  clearly  understood, 
both  by  teachers  and  boards  of  trustees,  is  that 
the  resources  which  the  foundation  may  employ 
to  give  the  proposed  new  benefits  to  one  set  of 
teachers  will  be  taken  away  from  another  set  of 
teachers  (usually  in  the  same  institutions),  who 


248  CABNEGIE 

have  in  equity  a  prior  claim — as  the  trustees  of 
the  foundation  have  formally  recognized. 

(c)  The  disability  insurance  offered  by  the 
foundation  applies  only  in  cases  of  **  total  per- 
manent disability. ' '  Few  teachers  suffer  total 
permanent  disability,  as  this  term  is  usually  con- 
strued by  the  courts ;  but  against  lesser  disabil- 
ities which  yet  might  disqualify  teachers  for  the 
practise  of  their  vocation  no  insurance  appears 
to  be  offered.  One  of  the  two  benefits  which  the 
foundation  now  declares  its  intention  of  grant- 
ing (to  teachers  in  institutions  which  comply 
with  its  new  requirements)  thus  appears  to  be 
of  very  limited  value,  even  supposing  that  the 
intention  should  be  realized.  The  other  new 
benefit — ^which  is  equally  non-contractual — 
namely,  the  offer  of  an  additional  one  half  per 
cent,  interest  on  the  accumulated  sums  paid  by 
teachers  and  institutions  towards  teachers'  an- 
nuities, brings  the  total  rate  of  interest  on  these 
payments  to  less  than  can  be  obtained  from  gov- 
ernment or  municipal  bonds — ^the  purchase  of 
which  would  be  a  much  more  advantageous 
means  of  accumulating  the  amount  necessary  for 
the  eventual  purchase  of  an  annuity. 

The  proposed  new  arrangement,  it  should 
further  be  noted,  has  the  effect  of  continuing 
the  supervisory  relation  of  the  foundation  to  the 
American  colleges  and  universities.  For  reasons 
which  have  been  set  forth  in  the  reports  of  Com- 
mittee P,  we  regard  it  as  undesirable  that  this 


PENSIONS  249 

relation  should  become  permanently  established. 
After  the  arrangement  is  entered  into  by  any 
college,  it  will  remain  within  the  power  of  the 
foundation  to  amend  or  alter  its  rules  of  eligibil- 
ity to  the  **list  of  associated  institutions,'*  and 
so  to  exercise  pressure  upon  the  policy  of  an  in- 
stitution, by  threatening  to  remove  the  institu- 
tion from  the  list.^  The  effect  of  the  removal 
from  that  list  of  a  college  or  university  which 
failed  to  comply  with  the  amended  regulations, 
would  apparently  be  to  deprive  teachers  in  that 
institution  of  any  further  claim  to  the  benefits 
held  out  to  them  by  the  foundation  at  the  time 
the  institution  was  originally  placed  upon  the 
list.  It  is,  indeed,  provided  (though  **non-con- 
tractually")  that  removal  of  a  college  from  the 
associated  list  **  shall  not  result  in  the  discon- 
tinuance of  retiring  allowances  already  granted. ' ' 
There  is  no  provision,  however,  precluding  the 
discontinuance  of  benefits  not  yet  actually 
granted,  but  only  made  the  subject  of  a  declara- 
tion of  intention  by  the  foundation.  Such  dis- 
continuance, nevertheless,  would  mean  the  dis- 
appointment of  definite  expectations,  which  the 
governing  board  of  the  college  would  be  jointly 
responsible  with  the  foundation  for  having 
caused   the  teacher  to   form— expectations   by 

2  See  ''Bules  for  the  Admission  of  Institutions, 
1918, '^  page  3.  It  will  also  be  remembered  that  the  per- 
sons who  manage  the  foundation  will  control  the  surplus 
accumulations  of  the  new  insurance  company. 


260  CABNEGIE 

which  his  plans  of  life  and  mode  of  investment 
of  his  savings  would  have  been  influenced.  A 
governing  board,  under  these  circumstances, 
would  be  subject  to  a  material  inducement  to 
make  such  changes  in  its  organization  or  meth- 
ods as  the  foundation  might  dictate.  It  appears 
to  us  anomalous  and  dangerous  that  an  irre- 
sponsible outside  body  should,  by  the  voluntary 
action  of  college  or  university  boards,  be  put  in 
a  position  from  which  it  can  subsequently  exer- 
cise this  kind  of  material  pressure  upon  the  pol- 
ices of  those  boards.  The  opinions  of  the  Car- 
negie Foundation,  or  of  its  president,  concern- 
ing educational  questions  should,  in  our  judg- 
ment, rely  upon  their  intrinsic  merit  for  their 
influence  upon  the  policies  of  our  higher  institu- 
tions ;  that  influence  should  not  be  reenf orced  by 
an  arrangement  enabling  the  foundation  by  the 
threat  of  a  sudden  withdrawal  of  anticipated 
benefits,  to  involve  in  more  or  less  serious  em- 
barrassment boards  or  administrative  officers 
who  decline  to  conform  to  its  views. 

It  remains  to  ask  whether  the  teacher  will  not 
substantially  benefit  by  the  provision  that  his 
college  or  university  shall  pay  half  the  amount 
of  his  annuity  premiums.  Upon  this  two  things 
are  to  be  said.  In  the  first  place,  it  is  question- 
able whether  much  advantage  would  in  the  long 
run  accrue  to  the  teacher  from  such  an  arrange- 
ment. President  Pritchett  has  recently  re- 
marked that  **a  pension  paid  by  an  employer  is 


PENSIONS  251 

in  its  practical  effect  deferred  pay,  which  only 
a  minority  ever  receive.  There  is,  indeed,  no 
such  thing  as  a  free  pension  when  it  is  involved 
in  the  relation  which  exists  between  employer 
and  employee.  It  will  inevitably  be  absorbed  in 
wages.*'  These  remarks  obviously  apply  to  a 
contribution  made  by  a  college  out  of  its  cor- 
porate funds  towards  the  purchase  of  an  annuity 
for  a  professor.  If  the  institution  has  the  means 
of  making  such  contribution,  it  has  also  the 
means  of  increasing  salaries  by  a  corresponding 
amount.  In  the  opinion  of  many,  it  is  much  to 
be  preferred  that  the  sum  should  be  paid  in  the 
form  of  salary,  and  not  as  an  inducement  to 
teachers  to  employ  their  own  savings  in  the  pur- 
chase of  a  specified  type  of  provision  for  old  age 
from  a  designated  non-mutual  and  non-partici- 
pating insurance  company  sustaining  an  anom- 
alous and  undesirable  relation  to  our  higher 
educational  system.  An  increase  of  average  sal- 
aries in  the  American  colleges  is  inevitable  in 
the  near  future,  for  obvious  economic  reasons— 
unless  the  quality  of  the  profession  is  to  be  al- 
lowed gravely  and  rapidly  to  deteriorate.  But 
it  is  probable  that,  as  a  rule,  this  future  increase 
will  simply  be  diminished  by  approximately  the 
amount  of  the  payment  made  by  any  institution 
towards  the  purchase  of  annuities. 

In  the  second  place,  what  is  proposed  by  the 
Carnegie  Foundation  is  that  college  and  univer- 
sity teachers  shall  be  compelled  by  the  boards  of 


252  CAENEGIE 

trustees  of  their  institutions  to  purchase  some- 
thing which  some  teachers  do  not  need,  and 
which  many  others  can  not  afford  and  should  not 
buy.  For  it  is  required  by  the  new  plan  that  the 
joint  payments  of  teachers  and  institutions  shall 
be  devoted  to  the  purchase  of  deferred  annuities. 
But  most  of  the  younger  teachers  should  be  em- 
ploying their  savings  primarily,  not  for  laying 
up  provision  for  their  own  old  age,  but  for  the 
protection  of  their  dependents.  An  assistant 
professor  at  the  age  of  thirty,  who  is  struggling 
to  support  a  wife  and  children  on  $1,800  or 
$2,000  a  year  is  usually  in  no  position  to  buy 
hoth  a  future  annuity  for  himself  and  adequate 
insurance  for  his  family.  It  is  a  grave  hardship 
to  such  a  teacher  to  compel  him  to  spend  nearly 
ten  per  cent,  of  his  annual  compensation  for  an 
annuity  payable  thirty-five  or  forty  years  later, 
and — ^what  would  frequently  result — ^to  leave  his 
dependents  meanwhile  without  proper  protec- 
tion against  the  hazard  of  his  death  or  prolonged 
illness.  Most  teachers  would,  and  should,  pre- 
fer to  meet  first  the  more  immediate  and  im- 
perative duty,  and  to  leave  provision  for  their 
age  until  the  later  years  of  their  service,  when 
their  salaries  will  be  larger  and  their  children  no 
longer  dependent. 

We  conclude,  therefore,  that  there  is  no  good 
reason  why  an  institution's  contribution  towards 
annuities  for  its  teachers — if  it  desires  to  make 
such  contribution — should  be  accompanied  by 


PENSIONS  253 

the  requirement  that  the  annuities  shall  be 
bought  of  the  new  insurance  and  annuity  asso- 
ciation. It  is  desirable  that  large  institutions 
should  establish  their  own  pension  systems,  con- 
tributory or  other.  Institutions  which  are  not 
able  to  do  this  will,  in  our  opinion,  serve  neither 
their  interest  nor  that  of  the  teacher  by  making 
their  contemplated  additions  to  the  teachers' 
present  or  deferred  compensation  contingent 
upon  his  willingness  to  invest  approximately 
ten  per  cent,  of  his  total  salary  in  a  policy  of  the 
recently  established  company.  Still  less  will 
they  do  so  by  making  such  investment  com- 
pulsory. 

It  is,  in  any  case,  manifest  that  no  institution 
should  adopt  a  plan  of  this  kind  without  full 
consultation  with  its  faculty.    A  faculty  should, 
in  our  opinion,  decline  as  a  body  to  participate 
in  the  plan,  unless  it  shall,  after  full  examina- 
tion and  discussion  by  all  the  teachers  affected, 
have  been  approved  by  a  substantial  majority. 
Arthur  0.  Lovejoy, 
President  of  the  Association 
Harlan  F.  Stone, 
Chairman  of  the  Committee  on  Pensions 
and  Insurance 


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